Pre-merger preparation and post-merger integration

Mergers and acquisitions are still critical for sustainable and profitable growth and to refocus corporate portfolios on core business and value-generating activities. This issue continues to gain importance in a world of global, deregulated and highly competitive markets.

However, empirical evidence shows that only a few companies reach their stated growth and value generation targets in M&A deals. More than half of all deals even destroy value and lower profitability in the long term.

A merger or acquisition – especially within a complex cross-border situation or the evolution of an innovative business model – confronts business leaders with diverse challenges.

In the pre-merger phase, successfully planning and initiating an M&A deal requires a sound strategy and a deep understanding of operational, financial, legal, tax, and cultural issues. These are necessary to truly understand the fit and the value of prospective targets. Comprehensive valuation and negotiation skills are required to close a favorable deal.

Yet once the deal is closed, the challenges magnify. During the post-merger integration phase, strategic buyers are forced to immediately unlock the announced value while integrating different functions, processes, systems and cultures. Buyers are expected to do all that while maintaining business momentum and integration speed as well as operating within regulatory constraints. And of course, none of these actions must negatively impinge upon day-to-day business.

We walk you through a successful integration process

At Roland Berger Strategy Consultants, we support our clients in all phases of the M&A process.

Based on a sound growth and M&A strategy, we facilitate the selection of appropriate acquisition targets in the pre-merger phase. In the post-merger phase, we manage and accelerate implementation to integrate the companies and capture value – quickly and sustainably. We also provide support during the demerger and divestment process to shape and refocus the corporate portfolio.

Both strategic and financial investors trust our expertise and experience in elaborating strategic (de-)merger concepts in addition to our hands-on operational and implementation support to create lasting value.

1. M&A strategy

In the pre-merger phase, we start by defining ambitious growth and portfolio strategies and identifying attractive M&A targets with a strong strategic fit. Based on an initial outside-in analysis and industry benchmarks, we assess the target's potential for generating value and help come up with a preliminary price.

2. Due diligence and deal preparations

Due to our track record in restructuring, we possess extensive experience in attaining a deep understanding of a company's overall condition in a short period of time. Accordingly, commercial due diligence and synergy analysis are two of our core strengths within the M&A lifecycle. Furthermore, we work together with attorneys, auditors, and tax advisors to form a complete target profile. Our goal is to ensure that our clients do not pay more than the target is worth. To realize the best possible deal, we work with our clients and their attorneys to devise sound negotiating tactics. We assist in jump-starting the integration and value capture by installing "clean teams" for advanced data analysis, and by realizing quick wins with arm's-length contracts prior to closing.

3. Value capture and PMI

Mergers and acquisitions create value only when the value of synergies exceeds the acquisition premium paid. We assist our clients in identifying and unlocking the full value potential of a merger or acquisition. This includes enhancing revenue and asset efficiency, reducing OPEX and cost of capital as well as tightly monitoring integration costs. Industry-specific benchmarks and synergy opportunity checklists enable us to immediately spot the areas with the greatest value potential. Apart from pure consolidation benefits (e.g. scale, duplication) and reconfiguration benefits (e.g. new organization structure), we particularly look for "enabled" benefits to unlock completely new sources of value as result of the merger (e.g. best practice transfer, new bundled value propositions).

During the actual post-merger integration, we support our clients in planning and running a smooth Day 1 and Day 100, as well as defining the target state of the new company. Based on the integration master plan, the new business and operating model are clarified and put into place. Continuous meaningful communication and a cultural change program ensure sustainable employee support of the merger. Especially in large and complex cross-border mergers, a program office is key to coordinating and monitoring the integration progress throughout multiple countries, business units and functions.

4. Divestment and demergers

Consistent M&A lifecycle management also means divesting business areas that do not fit the corporate strategy or are not part of the core business. We assist our clients in developing a sound divestment strategy, identifying and analyzing potential areas for divestment, and in designing the demerger concept. Furthermore, we support the sale process (VDD, information memorandum, data room, etc.) and manage the actual demerger and carve-out process.

For all M&A phases and activities, Roland Berger Strategy Consultants is an excellent partner across all industries. The combination of the following allows us to add significant value for you and achieve lasting results.

• Comprehensive expertise and successful project experience from all areas of cross-border M&A across all industries
• Comprehensive track record of M&A research and publications
• Specific understanding and experience of topics, issues, tasks and success factors of various industries
• Comprehensive M&A tool and template kit to jump-start the integration and front load the value capture process (e.g. valuation and synergy metrics model, Day 1 readiness checklists, quick win opportunity checklist, functional blueprint templates, cultural change audit, communication toolbox)
• Proven program management tool, RBpoint, to manage and monitor the integration progress