Acquisitions

childhood aphsi

Rather than listening to conventional wisdom or advice from the occult, people involved in mergers and acquistions should heed the guidance of these authors.They provide useful, solid, and proven advice for those who would really like to "get it right."
The authors are experienced and helped a number of "big league" organizations. They sort out the practical from the theoretical.
In writing this clear guide, they also displace many current myths about this business, including "culture is important but no one knows how to deal with culture." Now we do, thanks to Carleton and Lineberry.

Written in clear terms with approriate cases-in-point this is a must for anyone doing an acquisition or advising one. Really good stuff.

As an executive coach, I have read just about every book on M&A to help my clients navigate the turbulent waters of mergers, acquisitions and subsequent integration. This book is the best by far. M&As are up sharply in this economy as a means of pursuing corporate growth; however, as this book deftly illustrates, 55 to 75 percent of all mergers fail to achieve their financial goals. The authors cite disturbing statistics associated with M&As: stock prices decline approximately 70 percent of the time when an M&A is announced; only 23 percent of acquisitions earn back their capital cost; productivity declines 50 percent during the first four to eight months after the M&A; and about 60 percent of mergers result in lowered profitability for as long as seven years after the merger. Clearly, poorly-executed M&A's can be career-limiting. The reason for M&A failures is not a lack of financial and legal due diligence. Most executives engage in exceptionally thorough legal and financial due diligence processes. The reason for failed M&As is culture clash, the inability to integrate the operational, cultural and people aspects of the merging organizations. Culture clash results in internal confusion and in-fighting, inefficiency, frustration, downtime, and too much internal focus when what is needed is an external focus on customers. In addition to loss of staff morale and motivation, poorly executed M&As can result in the loss of key executives (nearly half within three years), decreased customer service and satisfaction, and brand confusion.

This outstanding book outlines a simple and effective process for my executive clients to engage in cultural due diligence (CDD). This process can be undertaken simultaneously with the legal and financial due diligence processes, usually inside of 30 days. This cultural due diligence process can eliminate culture clash, significantly increasing the likelihood of success of the merger, my executive clients and their careers. I view CDD as an essential process which supports the M&A, not one which turns up reasons not to pursue it. In addition to the logical and simple CDD process presented in this book, authors Bob Carleton and Claude Lineberry have included many case studies of successful M&A's as well as helpful worksheets and flow charts to help my executive clients pilot their M&A and integration. They've even included a CD-ROM filled with checklists, worksheets, agendas for staff and executive meetings to ensure cultural alignment, and other integration tools which can be customized and/or reproduced. I plan to give this book to every one of my executive clients contemplating or engaging in a merger. It just may save their careers!

For a number of years I was the CFO of an organization that acquired several companies. The acquisition strategy always made sense, the financial and legal due diligence process was conducted flawlessly, but we still never achieved our pre-merger financial estimates in the timeframe we thought we would get them. Why? Because of the people issues! I always thought that people, then, were the "wild card" in a merger or acquisition. You can't predict or forecast what they will do after the merger takes place. Messrs. Carleton and Lineberry provide a simple, easy to understand process where for the first time I understand how the people and cultural aspects of a company can be evaluated even before the merger is complete. AND, you can do something with that evaluation to help prepare for the inevitable people clash! As a CPA, thank you for opening my eyes to look simultaneously at the people issues as well as the financial issues in the cultural due diligence process.

In an email to the author, a Vice President (Mergers & Acquisitions) from a leading global investment bank writes -- Just polished off the 1st chapter on equity method investing. Totally on point. We just advised someone on a potential minority investment in a distributor and every one of these issues about phantom write-ups and cash flow impact came up.

Nice job -