It’s been a while since I’ve posted under The Portfolio Partnership (TPP) brand, actually over 3 years. I’ve been busy embedded in the Swedish public company Mycronic, helping to scale their US operations, project managing a build out of a state of the art 100,000 square feet facility in Massachusetts integrating three subsidiaries into the site, executing their Marcom strategy, rolling out Customer Experience (CX) programs and building and driving an M&A program. Great people and great fun.
However, a new chapter is driving me forward. I’m returning to my first love M&A, and I’m being joined by my friend and previous collaborator Kevin Young. I thought I had quite a nice, rounded resume but check out Kevin’s leadership background. Web Industries, Mondi, Avery Dennison, Sony and P&G.
We believe there is a gap in the market for Buy-side investment banking with a difference. I advised companies on acquisitions throughout the 90s (yes, I’m seasoned) and it’s a little frightening to think how naive I was operationally. Now I was instinctively a very good negotiator (Glasgow roots and CA training helped), but my understanding of post-acquisition integration was limited. To really master acquisition execution, we believe you need two main elements, a great process and operational experience. At TPP we have both.
An acquisition’s success can’t be measured at closing. Will it be a success two- or three-years post acquisition? This is the real question. In August 2019 the Wall Street Journal published a great article spotlighting the worst deals in history. In April 2015, before the acquisition of Monsanto, Bayer was the most valuable German company at a value of $128 billion. The $63 billion Monsanto deal closed in June 2018. Today Bayer’s market capitalization is now close to $58 billion. Were they alone in failing to deliver acquisition value? Nope. One year after the following acquisitions, the acquirer’s share price dropped dramatically. Bank of America acquired Countrywide, a 45% share price drop. Alcatel acquired Lucent, a 39% share price drop. AOL acquired Time-Warner, a 37% share price drop. Sprint acquired Nextel, a 29% share price drop. So, what does this tell us?
Whether it’s a $2m deal or a $2 billion deal, the successful integration of the target and the long-term success of the deal are not guaranteed but the process followed can dramatically change the odds.
By deploying our rigorous 25 stage playbook (as highlighted in my Amazon book The Acquirer’s Playbook), using an operator’s skillset, it is possible to find the right targets, at the right price, and successfully integrate them into your group to achieve long term success.
Executing a successful M&A program will require a different approach for most acquirers. One size does not fit all. Acquisitions are complex, time consuming, and each is unique.
If you are contemplating an acquisition, want help with an existing project, or want to begin developing a methodology to enhance success, give me a call, I am always ready for a chat.
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