Accelerating Growth

Acquisitions

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Where are you on your acquisition journey?

With global M&A activity picking up after a five-year slump, nearly half of global companies with revenues up to US$3b are considering pursuing an acquisition in the next 12 months.*

Yet while many drivers of M&A activity are growth related – increased market share, geographic expansion, acquisition of new talent, products or services – the reality is that such deals often fail to deliver the hoped-for benefits. An analysis of why acquisitions fall short of expectation shows that failure to capture synergies and poor execution of the integration are among the most frequently cited issues.

Five steps to success

Like any journey, a successful acquisition requires a clear road map. EY has identified five key phases of an acquisition lifecycle, each of which plays a pivotal role and requires specific expertise, whether it’s deal financing, risk assessment, talent retention or portfolio optimization.

The key to success lies in developing a robust and holistic plan that spans the entire acquisition lifecycle – from identifying the right potential targets at the outset to ensuring an effective integration after the deal is done.

EY - Accelerating growth: acquisitions

According to our research, leaders are reporting a strong increase in expectations to pursue an acquisition, yet the likelihood of closing deals remains subdued.

Embarking on an acquisition also has implications right across your organization, so taking a holistic view is key. Transactions and alliances represent one of the EY 7 Drivers of Growth, developed to help companies align their capabilities with their strategy to accelerate growth. This framework is based on decades of experience working alongside the world’s fastest growing companies, helping them to realize their growth ambitions.

Find out how EY can help you achieve lasting value from your M&A investment:

On the changing M&A landscape: “Over the last decade we have seen a real change in the way companies think about strategy. I see companies asking better questions earlier on, and because of that they are getting better answers.”
Ryan Burke, Transaction Advisory Services, Middle Market Leader, EY

On the rationale for doing a deal: “As a middle market company you have to find ways to innovate, you have to find ways for new product development and sometimes it’s faster and better to acquire that, than to try and do it organically.”
Charles Sweat, CEO, Chairman, Founder, Frequentz Inc.

On taking a disciplined approach: “While companies are actively looking to acquisitions as part of their growth strategy, the time it takes to close a deal is extending because it is a much more disciplined approach from beginning to end.”
Kath Carter, Transaction Advisory Services, EY

* According to EY’s April 2015: Capital Confidence Barometer