Now may be a good time to think of M&A
29/06/08 13:15 Filed in: News commentary
Peter Thal Larsen of the Financial Times published an interesting piece on 25 June 2008 regarding M&A.
While he points out that “now may not be the best of times to be thinking about mergers and acquisitions”, there is strong evidence that the worst deals are done at the top of a bull market. Conversely, a recent study by Towers Perrin and the Cass Business School in London found that companies that did deals in the year after a peak of a merger boom did much better at generating shareholder value.
It is important to point out these these deals tend to be more “conventional” rather than “breakthrough” and are consquently best suited to a carefully considered growth ambition. “Transactions struck after the peak of a boom are less likely to be deals of a risky, mould-breaking variety”. Clearly, there are important issues around pricing and execution / integration in order to deliver the benefits.
If you need help in:
Contact us for an exploratory discussion.
While he points out that “now may not be the best of times to be thinking about mergers and acquisitions”, there is strong evidence that the worst deals are done at the top of a bull market. Conversely, a recent study by Towers Perrin and the Cass Business School in London found that companies that did deals in the year after a peak of a merger boom did much better at generating shareholder value.
It is important to point out these these deals tend to be more “conventional” rather than “breakthrough” and are consquently best suited to a carefully considered growth ambition. “Transactions struck after the peak of a boom are less likely to be deals of a risky, mould-breaking variety”. Clearly, there are important issues around pricing and execution / integration in order to deliver the benefits.
If you need help in:
- Calibrating your growth ambition and focus
- Spotting potential M&A targets that could help you deliver your business goals
- Developing / testing the business logic
Contact us for an exploratory discussion.