The management teams playing offense, versus those waiting around on defense, may be the ones to come out on top. This echoes lessons learned from the great financial crisis of 2007-2008 when acquirers whose M&A was decisive and aggressive saw a 10-percentage point improvement on total return to shareholders versus those that didn't.1
In the COVID era, it's not just the big multi-billion-dollar deals to watch for; it's the smaller non-traditional transactions that may have significant transformative potential. Market-leading companies are snapping up digital assets that can digitize the supply chain or enhance customer experience in an increasingly socially distanced and virtual environment or bolster cyber security for the new emerging digital ecosystems. These deals may generate outsize returns in this "new normal."
So how do CEOs navigate this? With a better map, to be more virtual, nimble and digital.
- Better technology-enhanced due diligence with a focus on environmental, social and governance factors may be key, with more dynamic scenario planning, improved forecasting and the use of virtual data rooms.
- Focusing integration on understanding the target’s business model and managing the employee experience may be critical.