The M&a Value Equation

The M&A Value Equation

Harnessing the full results

from your strategy doesn't

start or end with Day One

Companies undertaking a merger, acquisition, or divestiture will usually invest considerable time and resources in

driving to a successful ‘Day One’, that being defined as

the first day organizations are legally merged or separated.

They will rigorously manage planning efforts up to and

through Day One to avert deal-stoppers, maintain business

continuity, and keep customer operations functioning, but

will often constrain or obviate efforts around Day Zero or

Day Two, being defined as diligence and deal evaluation,

and sustained value capture and execution respectively.

Even with a myopic focus a

stabilized business can be delivered

on Day One, but that would

provide only one element in what is

important to driving greater value

from your M&A transactions

However, savvy dealmakers realize it isn’t only about Day

One. While the Day One priorities center on stabilizing the

business, the Day Two priorities center on unlocking the

value inherent to the deal, consistent with those identified

during Day Zero. Often it is not until Day Two is reached

that a considerable amount of deal value can be realized–

when the new organization starts to attain an end state

that achieves the strategy for the acquisition and begins to

deliver on anticipated synergies.

Considerable effort and progress is required to reach

Day Two. Clear examples exist, such as: the necessity for

customer operations to acquire different core competencies, shift geographic coverage, or resolve conflicting

philosophies regarding direct sales and channel operations; supply chain realignment and vendor rationalization;

manufacturing capacity consolidation; and even corporate

functional consolidation into shared service centers or even

be geographically moved to labor- or tax-advantageous

locations.

For a variety of reasons, companies often don’t achieve a

Day Two...