Mergers & Acquisitions

Consulting offerings

Merger, acquisition and divestiture activity is on the rise as industry consolidation in select sectors continues, new regulations take shape, companies re-balance their portfolios, and others (strategic and financial buyers) look for smart ways to use the cash they have been protecting for the past few years. Of course, there’s a big difference between doing deals, and doing deals that deliver exceptional value. An acquisition or divestiture is likely to have a dramatic and lasting impact on your business – for better or worse – so it’s important to get it right from a strategic and operational perspective.

Deloitte’s Merger & Acquisition (M&A) related services are provided by consulting professionals who have worked on the front lines in some of the world’s most complex deals. With deep capabilities that can support M&A activities from strategy development and due diligence to transaction execution, integration, target screening and divestiture, Deloitte has been directly aligned with the M&A marketplace for over 30 years. Deloitte has provided services to some of the most sophisticated corporate strategic buyers and private equity investors. No matter what obstacles present themselves, Deloitte can help you in your efforts to be ready for Day One and beyond. Learn more about Mergers & Acquisitions.

What we offer

• Acquisition Strategy and Due Diligence
• Finance Integration and Divestiture
• IT Integration and Divestiture
• Sales, Marketing and Customer Integration and Divestiture
• HR Integration and Divestiture
• Integration and Divestiture Planning and Management

Many paths to M&A success

Some companies view an acquisition as a fast and easy way to grow revenue or market share. Others are looking to stake out the strategic high ground, or to acquire new products, markets, channels or technologies. And some companies are simply trying to keep up with competitors.

But there’s another layer of value to be gained from M&A, and many companies are pursuing it: the opportunity to transform. Many banks, for example, are consolidating in the wake of the financial crisis and dramatic financial reform. Some tech companies are expanding into new service areas and gobbling up emerging technologies. And some healthcare companies – including providers, insurers, and drug makers – are positioning themselves to capitalize on healthcare reform and looking to reduce costs through economies of scale. The list of transformation opportunities goes on and on.

In addition, for many acquisitions there is often a complex, related carve out that must be completed. Contrary to popular belief, carve outs are not the same as integrations in reverse. Although there may be similar characteristics between an integration and carve out (e.g., valuing the business accurately, negotiating the optimal price, doing the deal quickly), there are a number of specific features. For example, instead of integrating two businesses to optimize synergies, a divestiture involves spinning off part of a business while trying to minimize stranded costs and redundant activities that are no longer necessary to support the retained business. Furthermore, carve outs often involve complex Transition Service Agreement development, contract assignment and operations stand-up activities requiring cooperation across multiple parties with diverging agendas.

Bottom line benefits

• Increasing shareholder value through rapid, effective transaction execution
• Reducing risk by enhancing business continuity
• Identifying quick wins that give a transaction early credibility
• Capturing revenue and cost synergies through careful analysis and dogged follow-through
• Reducing disruption by focusing on people and change management
• Retaining customers and employees through rigorous execution of customized playbooks
• Sustainable cost structure reductions through operating model transformation

How to create more value now

1. Think about post-merger integration and carve out issues before you sign the deal. Don’t assume that simply combining two companies will automatically boost revenue by X percent and reduce costs by Y percent or assume a business or business unit can be easily carved out by closing. Take time to understand the major challenges that are likely to arise and what it will take to address them. Involve the people who will eventually be responsible for integration and execution.
2. Identify and address catastrophic risks. In any merger, there are a handful of activities that are too important to mishandle. These activities will require special care during the integration or divestiture. In fact, you might even decide to leave them as-is, rather than subjecting them to the risk of integration or divestiture.
3. Deploy tools and demonstrated techniques to monitor progress and benefits. Keeping a merger or divestiture on track requires constant attention and monitoring. But gathering the required data manually is time-consuming and prone to errors – which is why it often isn’t done. Take advantage of affordable, track-tested tools that make it easy to measure transaction progress plan and link actual results back to program goals.
4. Consider your audience. Companies often get so caught up in telling their transaction story that they forget to consider the needs of the audience. Don’t just focus on what you want to say – think about what the audience needs and wants to hear. For example, employees are primarily concerned about job security. Customers want to know if they can count on getting the products and services they need. Until those critical questions are answered, your grand transaction vision is likely to fall on deaf ears.
5. Proactively address people related issues and focus on change management. Too often companies focus solely on closing the transaction and achieving their transaction goals and don’t focus enough attention on the people involved in the transaction. Regardless of your business, people matter. Early identification and management of people related issues and related change management requirements, can position your transaction for success.

How we can help

Deloitte has the knowledge and experience to help with many types of M&A transactions. We have been directly involved with thousands of deals – from tuck-ins and bolt-ons to consolidations, transformations, and carve-outs – for companies in nearly every industry and geography. We don’t just offer general M&A knowledge, we offer direct, hands-on experience with deals just like the one you may be facing.

We also have demonstrated experience across the M&A lifecycle planning and executing post-merger integration and divestiture projects of various shapes and sizes, including some of the largest, most complex transactions ever completed. This experience not only allows our teams to hit the ground running and deliver high impact results quickly, but also enables us to advise you more effectively and provide leading practices and techniques – stacking the deck in your favor. Our acquisition and divestiture related services include:

• M&A Strategy
• Due Diligence (buy-side and sell-side)
• Pre-merger planning and post-merger integration
• Carve-out / divestiture planning and execution
• Functional planning, e.g. Finance, IT, HR, Sales, Marketing, Supply Chain
• Organization design and selection
• Change and communications

Our goal is to help you get the optimal possible price and complete the transaction better, faster and cheaper with less risk.

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