Why have a structured M&A process?

Mergers and Acquisitions (M&A) are complex transactions that can have a significant impact on a business’s growth and success. Well-structured M&A processes can result in increased efficiency, expanded market reach, and improved financial performance for companies. In this article, we will explore their importance based on the following criteria:

Increased Success Rate

According to a study conducted by McKinsey & Company, companies with a structured M&A process have a success rate of 53%, compared to 26% for those without such procedures. This structured approach helps identify and resolve potential issues from the outset, reducing the chances of failure.

Enhanced Efficiency

A well-structured M&A process can lead to increased efficiency by streamlining due diligence processes and reducing the time and resources spent on completing a transaction. A study by PwC found that companies with structured processes were able to complete their due diligence in up to 31% less time.

Improved Risk Management

Structured M&A also contributes to better risk management during the transition. By conducting precise and cautious due diligence and identifying potential risks early on, companies benefit from taking actions to mitigate them and avoid legal and financial issues later.

Financial Performance Enhancement

Companies that undergo a structured M&A process tend to have better long-term financial performance. According to a Deloitte study, businesses that successfully execute M&As have higher revenue growth rates and shareholder returns compared to those that do not.

A well-structured M&A process is essential for companies seeking growth and expansion through acquisitions. By increasing success rates, improving efficiency, enhancing risk management, and boosting financial performance, a thoughtfully designed structure can significantly impact business success. Recognizing its importance in achieving strategic objectives allows companies to position themselves successfully in today’s competitive business environment.