Mergers & Acquisitions
David Hane has recently published an article on the challenges of post-merger integration programs.
M&A is big business. According to Refinitiv, worldwide M&A activity totaled US$3.9 trillion in 2019. Of that, there were 43 deals alone worth over US$10 billion during the year (totaling US$1.2 trillion). Yet for all of this activity, how much value is actually created? Countless studies have documented the success rate for such transactions as ranging between 10% to 30%. With so much at stake, how can this be?
Integrations Gone Awry
No one factor is driving these outcomes. In some cases, the acquirer simply buys the wrong company. For example, the buyer’s strategic intent may be to acquire a business that will help them reinvent their business model. Unfortunately, identifying such candidates is extraordinarily difficult and most buyers aren’t able to pull this off. When you’ve acquired the wrong company, no amount of integration expertise will rectify the situation.
A more common factor driving M&A failure, and one that I’ve seen firsthand, is a botched integration. One of the easiest ways to derail your acquisition integration is to ignore the people dimension. Having an explicit plan to account for the people impact in an integration is also known as change management. You could fill a crater the size of the Grand Canyon with all of the information about change management. Don’t read all of it. Just know that you need to be deliberate and thoughtful in how you plan to integrate organizations.
Points covered in this article include:
- The consolidation of three businesses
- Why progress grinds to a halt
- Encouraging buy-in
Read the full article, A Requiem for M&A: The Best Laid Schemes o’ Mice an’ Men, on LinkedIn.
Umbrex is pleased to welcome Thomas Steiner with Steiner Advisory. Tom Steiner combines eight years as a leader in industry with four years of consulting experience, at McKinsey and as an independent. He has served in roles including Sr. Director, Corporate Strategy; Head of Supply Chain; and in various hands-on operational positions where he has led up to 400 people. Tom is particularly passionate about leading transformational change programs for clients. He has functional expertise in supply chain, operations, strategy, and M&A integration; and is focused on clients in industries including energy, industrials, technology, manufacturing, and private equity.
Tom lives in Houston, Texas with his wife and three daughters
Umbrex is pleased to welcome Amit Bhagat. Amit Bhagat brings together a combination of corporate and consulting experience. In the corporate world, he was General Manager of a $300M business unit of a public consumer goods company. In addition, he was Head of Strategy and M&A. Within his portfolio of responsibility, Amit led teams in each of corporate strategy; M&A and post-merger integration, business insights and analytics; and transformation. In the consulting world, Amit was Managing Director at PwC Strategy& focusing largely on M&A related engagements – post-merger integration planning and execution as well as post-merger growth strategy. Amit is based in Toronto.
Umbrex is pleased to welcome Steve Rooks. Steve Rooks has spent the last 25 years driving value creation across many different industries as a private equity portfolio advisor to TorQuest Partners, AMP Capital, Ontario Teachers’ Pension Plan (OTPP), Sun Capital and TPG Capital, an executive at Avaya and Bell Canada, and a management consultant at Bain & Company. His most recent PE portfolio efforts were for TorQuest Partners and AMP Capital to lead value creation in their respective North American portfolios, for Ontario Teachers to drive a Lean/ Operational Excellence transformation at an marine container terminal operator, and for Sun Capital to drive a merger consolidation of the Canadian operations for a folding carton manufacturer.
At Avaya, Steve was the GM for the $3.8B Enterprise Segment and a major alliance with HP. Steve joined Avaya from TPG Capital (one of Avaya’s owners), where he worked for several years with management teams to drive value creation and turnarounds across a range of TPG’s portfolio companies globally, including rapid $85+ million increases in EBITDA at a coal power and mine business, a medical device manufacturer, and a casino and hospitality business. Prior to joining TPG, Steve drove a $250 million transformation of customer experience at Bell Canada across all channels.
Steve joined Bell Canada after working for 8 years at Bain & Company, a leading management consulting firm, helping to drive change across many different industries and on the full range of topline and bottomline business challenges. He began his career as an engineer in IBM’s manufacturing division.
Steve holds a BASc (Honours) in Mechanical Engineering from University of Toronto, an MASc (Honours) in Mechanical & Electrical Engineering from University of Toronto and an MBA from Stanford University’s Graduate School of Business, where he was an Arjay Miller Scholar. Steve also holds 3 patents in applied image processing.
Umbrex is pleased to welcome Rodney Speering with Primrose Strategy. Rodney Speering spent 3+ years at McKinsey as an Engagement Manager and has been running his own strategy consulting firm since 2019. Prior to McKinsey, he worked for 7 years as a management consultant on a variety of heavy industry strategic and operational improvement projects, and 5 years as a mechanical engineer designing and managing large scale mining and oil & gas projects.
Although originally from Australia, he now lives with his partner in Germany – they are both keen hikers and enjoy the outdoors. Rod is happy to collaborate on strategic projects globally.
Umbrex is pleased to welcome Michael Janov with Azurite Consulting. Before joining Azurite Consulting, Michael spent 5 years with McKinsey & Company as an Engagement Manager working out of their Sydney, New York and London offices. There he devoted his time to M&A Transactions and Merger Management with a strong passion for B2B and Industrial sector work.
Michael previously worked in the Group Strategy team at Qantas Airways, where he led multiple teams in redefining the domestic strategy – stretching from network optimization and fleet management, through to embedding the first Group-wide customer strategy.
He holds an M.B.A from INSEAD, as well as a B.S. in Mechanical Engineering from UNSW. He enjoys playing soccer, snowboarding and cooking in his free time and is in the midst of transitioning from London to New York with his wife.
Michael joins Eli Diament and the team at Azurite Consulting. Azurite Consulting is the leading provider of unique primary research to private equity firms, hedge funds, large enterprises and portfolio companies in the B2B space. With a 100% track record and repeat clients, Azurite consistently delivers unique datasets of niche, difficult-to-find respondents in high volume and obsessively high quality.
Michael and Azurite are happy to collaborate with anyone at the crossroad of primary research and B2B to provide clients the highest level of conviction in their decisions.
Umbrex is pleased to welcome Jay Jung with Embarc Advisors. Jay Jung was an Engagement Manager in McKinsey’s Hong Kong office where he was part of the Corporate Finance practice. His prior experience includes investment banking at Goldman Sachs New York and San Francisco offices, where he was a Vice President and completed ~$50 billion M&A and capital market in transactions. He also started his own technology startup, which raised funding from Softbank and other VCs.
In 2018, Jay started a consulting firm focused on helping startups and small medium size business in their fundraising, strategic finance, growth and M&A. He also works with private equity and venture capital firms in supporting investment due diligence, financial modeling and presentations. Jay lives in San Francisco, California. Jay is happy to collaborate on projects involving complex financial modeling, capital raise or M&A.
Umbrex is pleased to welcome Brett Pentz. Brett has 12+ years of management consulting and client services experience, delivering a range of strategy engagements for corporate, private equity, and public sector clients across industry, mostly focused in Healthcare and Technology. Brett’s management consulting work spans formative skills and credentials developed at Bain & Company, followed by contributions to position Teneo’s management consulting capabilities to reflect its brand as the global CEO advisory firm. Brett also possesses strong implementation and value delivery credentials from his years as a healthcare software implementation specialist for leading electronic medical record vendor Epic.
Brett primarily focuses on roles and projects where his experience and educational background can add the most value, often serving health and wellness-focused services and technology platform-focused companies, but he has demonstrated successful outcomes as a generalist at Bain and Teneo across a range of industries and project types. Specialties include corporate/BU strategy and planning, sales and marketing effectiveness, commercial due diligence and post-acquisition value creation, and target operating model and organizational design.
Brett lives in Montreal, Canada with his wife, after moving there two years ago from London, England – all part of his American expat adventures. He is happy to collaborate on any projects, particularly in the northeast (of the US and Canada).