CFO Signals™ – 2012 Q1 M&A Results
CFO Signals Survey suggests companies want (and plan) to invest their cash, and much of the investment is likely focused on Mergers and Acquisition (M&A) deals.
The latest CFO Signals report revealed M&A is clearly on the front burner for many large companies. Specifically, we took a look at current approaches to M&A, and the purpose of the M&A deals.
Current approaches to M&A
Proactive around smaller deals; opportunistic around others
Although only about one in five CFOs claims to be seeking major transformational deals, more than half say they are actively seeking smaller deals. And the numbers are considerably higher within some industries.
- Actively seeking smaller strategic deals now (to take advantage of favorable opportunities and/or valuations): Nearly 55% of CFOs say their companies are utilizing this approach.
- Actively seeking major/transformational deals now (to take advantage of favorable opportunities and/or valuations): Nearly 22% of CFOs say their companies are utilizing this approach.
- Delaying major deals (in anticipation of better opportunities and/or valuations in the future): Just 8% of CFOs say their companies are delaying major deals, but 17% of Manufacturing CFOs say their companies are utilizing this approach.
- Other approaches: Just 8% of companies indicate other approaches, most of which center on deferring M&A altogether.
Figure 1. Approach to M&A
Purpose of M&A deals
Strengthen current business in current markets
What are companies hoping to achieve through their current M&A efforts?
Earlier findings around companies’ challenges and strategic focus suggest that growth in current markets is the dominant current focus for most companies. Companies’ M&A goals are consistent with these findings, reflecting a high focus on existing markets, synergies around current businesses, and scale efficiencies.
- Expand customer base in existing markets (current geographies and products/services): About 47% of CFOs say their companies have M&A efforts focused on this purpose. Pursue synergies: About 43% of CFOs say their companies have M&A efforts focused on this purpose.
- Pursue scale efficiencies: About 42% of CFOs say their companies have M&A efforts focused on this purpose.
- Diversify customer base via new markets (new geographies and/or products/services): Nearly 40% of CFOs say their M&A efforts are focused on this purpose.
- Other approaches: About 10% of companies indicate other approaches, most of which center on acquiring new technologies, product lines, and talent.
Figure 2. Purpose of M&A deals
Interested in learning more? View the complete Q1 CFO Signals report and past findings at www.deloitte.com/us/cfosignals.
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