The initial phase in mergers and acquisitions seems to be the simplest: choosing the M&A target. Yet acquirers often pursue targets opportunistically, rather than methodically, contributing to high failure rates. BCG’s mergers and acquisitions consultants help clients create the strategic, replicable merger and acquisition processes that drive successful corporate unions.
Choosing the wrong target for a merger or acquisition can be easy to do. Companies may be motivated by the sudden availability of appealing prospects or by cash surges that encourage spending. Others want to grab seemingly good deals before their competitors—or get too caught up in winning to walk away from bad ones.
Conversely, successful acquirers are proactive pursuers that use ongoing, disciplined, and open-minded processes to search for targets. Astute buyers ask, “Which deals will help us realize maximum value?” not “How fast can we get this one deal done?” In effect, they treat mergers and acquisitions as one more essential line of business.
BCG’s mergers and acquisitions consultants bring a strategic, value-creating perspective to every engagement to deliver fresh insights via an efficient, results-oriented process.
We also help you avoid some all-too-common traps for M&A. For example:
BCG tailors your merger and acquisition strategy through an iterative, highly collaborative approach. Our mergers and acquisitions consultants serve as partners for senior management, drawing on our global network and cross-industry perspectives, supported by proprietary methodologies and digital tools.
We help you pursue buy-side mergers and acquisitions and create or enhance replicable mergers and acquisitions processes in-house.
Because BCG views value creation in mergers and acquisitions as a continuum, we’re also prepared to support you at every stage, from transaction strategy to post-merger integration. M&A target identification typically takes about 3 months and is the first step in a process that can last up to 18 months.
Our M&A transaction services combine our extensive expertise in all types of M&A-related processes, such as due diligence, with our industry-specific expertise, such as consumer M&A and health care M&A.
Successful mergers and acquisitions flow from corporate strategy. The best acquirers clearly articulate how any purchase will fit within that larger strategy while formulating a defensible rationale for the purchase that creates value.
BCG has defined five steps for M&A target identification and evaluation:
Generate ideas. Apply different lenses to develop a long list of potentially attractive industries and segments: consider different classification approaches, database and IP screening, and the relevance of such megatrends as climate change and shifts in international trade.
Prioritize the long list of industries and segments. Carry out an initial assessment of structural attractiveness. Generate about 200 candidates.
Create and categorize the short list. Develop common-sense exclusion criteria for segments and targets. Pare down to 20 to 30 companies. Profile and analyze from multiple angles, including risks. Check availability.
Refine the short list. Further evaluate segments and companies. Reduce to fewer than ten targets
Launch a deep dive into the M&A target. Thoroughly explore feasibility, financing, risks, and other vital dimensions—and prepare for initial due diligence.
Our mergers and acquisitions consultants and industry experts help clients search for and identify targets, as well as handle change management, during mergers and acquisitions.
M&A, Transactions, and PMI Services
BCG has deep expertise in a multitude of industries, with comprehensive knowledge of all aspects of M&A activity and post-merger integration, to help you realize the full value of your transaction.
Dealmakers should prepare for a slower clearance process in the near term and expanded regulatory scrutiny over the long term.
M&A can play a major role in helping companies survive the crisis. Preparation, steady nerves, and a willingness to be bold are the keys to success.
M&A dealmakers can take advantage of downturn opportunities to position their company for profitable growth during the recovery.
For leaders with strong transformation experience, a slowing economy can be an opportunity to buy troubled assets at a discount and create value by turning them around.
