CHRONICLES OF M&A INTEGRATION

PRE-CLOSE POSSIBILITIES - Leveraging the Due Diligence Period for Better PMI Planning

October 27, 2020
CHRONICLES OF M&A INTEGRATION
PRE-CLOSE POSSIBILITIES - Leveraging the Due Diligence Period for Better PMI Planning
Show Notes

In today's podcast, I'm joined by my Global PMI Partners friend and colleague,  Matt Podowitz  
Matt is going to walk us through the pro's and con's of two very similar transactions that had very different outcomes. Transaction A and Transaction B both were add-on acquisitions to existing platforms, and both were being executed and integrated in a similar manner. 

Both transactions were structured as asset purchases to leave behind liabilities. The investment thesis for both envisioned consolidation of SG&A functions and rationalisation of PP&E to create cost synergies, and both anticipated revenue synergies through cross-sales of products to existing customers of the platforms. 

Both transactions were closed at a price favourable to the buyers. Transaction A was a runaway success. Transaction B failed to meet any of its targets for the Buyer and ultimately was re-sold at a loss.

What was the difference? The buyer in Transaction A engaged a team to begin developing a high-level integration strategy and start integration planning during the due diligence period. The buyer in transaction B did not.