March 2005Five ways to spot a good deal
The Wall Street Journal 3/29/2005
by David Harding and Sam Rovit
Monster deals are back in vogue. In the last five months alone, 13 deals have been announced with valuations totaling more than $10 billion. So, after whistling at the size of the latest big deal, how can an investor judge whether a management team is following a prudent course? Our research concludes that deal success is not random. There are clear indicators that investors can use to assess whether they should expect a huge success or a big flop. Investors can handicap their management team's likelihood of success on five criteria.
October 2004 Can deal making solve your growth problem?
Results Brief newsletter 10/27/2004
by David Harding and Sam Rovit
Every executive who's been involved in a large acquisition wrestles with "the growth paradox": 70 percent of major deals fail, but it's nearly impossible to achieve strong growth without doing deals. Bain has looked closely at the practices that lead to M&A success. The findings of that research, led by David Harding and Sam Rovit, are contained in the new book Mastering The Merger: Four Critical Decisions That Make or Break the Deal (Harvard Business School Press).
September 2004 Avoid Merger Meltdown: Lessons from Mergers and Acquisitions Leaders
Strategy & Innovation 9/15/2004
by David Harding, Sam Rovit and Alistair Corbett
No matter how compelling the business case, acquisitions inevitably run into difficulties. Key people leave, processes break down, information systems get tangled, and customers grouse. Most company leaders are blindsided by these impediments--they've focused so hard on nailing down the terms of their deals and hashing out broad integration plans that they've given short shrift to spotting specific problems. The most successful acquirers, however, don't ignore any of the details. Whether problems are manageable or cataclysmic, these acquirers have strong early-warning systems in place to identify them, and they respond to even the faintest distress signals without delay. Their approach can provide a valuable model for any company considering--or surviving--a merger.
Building Deals on Bedrock
Harvard Business Review 9/1/2004
by David Harding and Sam Rovit
The headlines are filled with the sorry tales of companies like Vivendi and AOL Time Warner that tried to use mergers and acquisitions to grow big fast or transform fundamentally weak business models. But, drawing on extensive data and experience, Bain's David Harding and Sam Rovit conclude that major deals make sense in only two circumstances: when they reinforce a company's existing basis of competition or when they help a company make the shift, as the industry's competitive base changes.
August 2004 A Simple M&A Model for All Seasons
Strategy & Leadership 8/1/2004
by Sam Rovit, David Harding and Catherine Lemire
To discern what makes some acquirers more successful than others, Bain performed a 15-year longitudinal study of 1,600+ global companies doing 11,000+ deals plus interviews with senior executives. The analysis of the companies that succeed at deal making and integration shows that they share some key practices which can be boiled down to this simple playbook.
April 2004When to Walk Away from a Deal
Harvard Business Review 4/1/2004
by Geoffrey Cullinan, Jean-Marc Le Roux and Rolf-Magnus Weddigen
Deal making is glamorous; due diligence is not. That simple statement goes a long way toward explaining why so many companies have made so many acquisitions that have produced so little value. In a recent Bain survey of 250 international executives with M&A responsibilities, only 30% of them were satisfied with the rigor of their due diligence. And fully a third admitted they hadn't walked away from deals they had nagging doubts about. Effective due diligence requires answering four basic questions: What are we really buying? What is the target's stand-alone value? Where are the synergies--and the skeletons? And what's our walk-away price? Each of these questions will prompt an even deeper level of querying that puts the broader, strategic rationale for acquisitions under a microscope.
October 2003 Organising for Deal Success
European Business Journal 10/1/2003
by Geoffrey Cullinan, Sam Rovit and Andrew Tymms
The recent stock collapse of some high-profile deal-makers has led many executives to pull back from mergers and acquisitions. But a Bain & Company study has found that the companies most successful at creating longterm shareholder value tend to make acquisitions constantly through boom and bust. The most successful deal-makers are companies that shop frequently, use dollar-cost averaging to identify opportunities instead of trying to time the markets, and mainly buy companies a fraction of their size. They build experienced deal teams that get involved in all acquisitions, they commit line expertise, and they always set a walk-away price and prepare to leave the table if the deal's economics fail to make sense. The multinational food company Nestlé provides one example of how the best acquirers can create value.
September 2003Turning Deal Smarts Into M&A Payoffs: Frequent buyers usually score the best deals, provided that they add skills in each transaction
Mergers & Acquisitions: The Dealmakers Journal 9/1/2003
by Sam Rovit, David Harding, and Catherine Lemire
Companies most successful at M&A have made it an integral part of their approaches, dealmaking teams, and acquisition processes through repetition - just as they would support any other core competency. This article addresses the following questions: What are the common denominators of companies that are M&A winners? How do the successful firms organize and approach dealmaking? Are these methods transferable?
May 2003 Should You Always Merge Cultures?
Harvard Management Update 5/1/2003
by Till Vestring, Brian King and Ted Rouse
Midsize mergers are an important source of growth. But how you handle cultural integration can make or break the deal.
Go to Harvard Management Update
March 2003 Your Best M&A Strategy
Harvard Business Review 3/1/2003
by Sam Rovit and Catherine Lemire
The companies that are most successful at creating long-term shareholder value tend to be those that systematically make acquisitions through good times and bad.
Go to Harvard Business Review
|
