Dear Clients and Friends,
The 2015 M&A market continues to be hot. Last month we saw record-breaking deals – Aetna and Humana announced the largest insurance deal ever and tech giant Intel announced its acquisition of Altera. But it’s not just large deals happening – the first half of 2015 saw US M&A break the $1 trillion dollar mark for the first time. And yet, despite the increase in the number of transactions, one thing remains the same: no one has a magic bullet for integration.
In this issue, we discuss the complexities of post-merger talent retention and how companies need to think carefully about how to approach employee compensation, performance management and career progression in order to avoid costly turnover. We also share the results from our C-level executive survey conducted with Mergermarket (hint: culture and change management are critical). Lastly, we share a few key themes and lessons learned from the M&A summit we hosted last month across analytics, technology, operations and customer experience.
We encourage you to send us feedback on the content or topics you'd like to see discussed in future issues.
Global merger and acquisition activity hit record levels in 2014, a trend that is expected to continue and even accelerate through 2015. Based on historic results, over 70% of merger transactions can be expected to result in failure and negative return for investors.
Mid-market firms are driving an increase in dealmaking activity, causing the M&A market to return to the highs last seen before the 2007-08 financial crisis, according to our new study, "Harnessing Potential: mid-market integration and managing change." This return to the pre-crisis highs of dealmaking, particularly in North America, is a reflection of a strengthening economy and confidence in mid-market companies to pursue growth.
Last month, we hosted our second annual mergers & acquisitions summit. We had a diverse audience across private equity, healthcare, manufacturing, banking and professional services. What we learned is that some things never change (integration is complex and messy) and that some threats are becoming critical due to changing conditions and workforce dynamics (security and culture). In this article, we review some of the common hurdles faced by attendees as well as their lessons learned.
John Stiffler will join Bay Area investment bankers, private equity and private company executives to share their insights on prepping businesses for sale at the ACG San Francisco chapter's June breakfast and panel discussion.