Organisations that make use of data analytics will improve their decision making as well as their chances of making the acquisition a success.
by
Joshua Hedge and
Mike Creasey
Data analytics is becoming a prominent feature of M&A deals, both during the pre-deal due diligence phases and to support more robust and detailed integration planning.
While companies typically use analytics in the M&A strategy development and screening of targets, Moorhouse is increasingly supporting clients to use data analytics during the due diligence and integration phases of the M&A lifecycle. The use of data analytics in M&A transactions will increase over the next few years and companies need to make use of the availability of data in order to drive informed decision-making and achieve more successful outcomes.
Data analytics means that public and private data sources can be used to identify business opportunities, commercial synergies and to support integration planning. Realising synergies is critical to any deal to make sure the value of the two companies, once successfully integrated, is greater than its individual parts. If you don’t get this right, dis-synergies may occur, leading to value destruction.
Planning Success
Recent research suggests that achieving a successful integration still eludes a large number of companies. While 62% of mergers were considered a strategic success, only 38% were considered a financial success and 30% an operational success1.
For many companies effective planning and delivery is still not there, and this can result in costly outcomes. When Daimler and Chrysler merged for $36Bn, combining two of the largest names in the automobile industry was seen as a highly strategic and synergistic move. However, poorly planned integration resulted in lost sales and market share. Subsequently, Chrysler was later sold for $7Bn at a significant loss. As this integration failure and the survey findings show, integrating two companies is no small challenge and the complexities should not be under-estimated.
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