Swanson & James Ltd

Solutions in Mergers & Acquisitions

Why has there been a lack of success with M&A’s?

The late 1990’s saw a number of high profile Mergers and Acquisitions that failed to live up to the expected synergy that drove the initial integration. In fact it has been suggested by industry experts that more than 50% of Mergers and Acquisitions fail in their first year.

While the globalisation of the world markets and rapid innovation in technology have caused the commercial world to operate in highly dynamic conditions, the major cause of M&A failure can not be attributed to an evolving trading environment. The reality is that despite the strategic logic behind a Merger or Acquisition, the equally important operational implications are often ignored. The result often brings two companies together that simply don’t fit. The end result is a break up of the merged companies – ultimately a loss of value rather than a gain.

Managing the operational integration of M&A’s with Swanson & James

Swanson & James believes Corporate Restructurings often fail to achieve the projected expectations because operational procedures are not dealt with adequately. The success of an originally shrewd strategy is thus thwarted. Swanson & James believes that considerations in the M&A process must go beyond mere strategies and must equally respond to the operational needs a specific strategy will entail. Without consideration of ‘operational fit’, even the best strategic planning will fail to realise its potential.

Swanson & James’s added value in the M&A process

During due diligence: Due diligence encompasses financial verifications and for the most part is a strategic exercise. Although a merger or acquisition maybe financially viable and represents a sound strategic move, from a practical position they often can not work because the two companies are so different, either culturally, structurally, or through the internal processes employed. Swanson & James’ expertise in internal processes is an essential element to bring to due diligence. Swanson & James can assess the suitability of M&A’s from a practical viewpoint to identify areas that are likely to cause failure.

Integrating two companies in the most optimal way: Once a merger or acquisition has been completed, there is a requirement to integrate the two companies. Even if an acquired company is intended to be left as an independent entity, there must still be internal changes to accommodate new financial reporting lines and channels of authority. Managing and implementing changes in internal processes in order to produce more efficient and cost effective operations is where Swanson & James’ true expertise lies.

To view a number of the innovative concepts that are used in
company integrations, see Formulating Solutions.

For further information about how Swanson & James can assist in Merger and Acquisition, please contact us at: info@Swanson & James.co.uk