M&A and Divestitures
M&A and divestitures are an integral part business success. Why? Growth drives value creation, and acquisitions provide strategic advantages. They provide an alternative to organic growth and faster access to new markets. Actively reviewing your business portfolio can sustain your company’s capacity to deliver value. This is not an easy task—most M&As destroy value. The key is to manage corporate transactions as an ongoing process, not an occasional activity.
Treadstone’s strategic services will provide you with the knowledge and decision-making support your business needs to exceed expectations.
The Treadstone Philosophy
Treadstone consultants understand M&A. Our experienced team knows that delivering value in an M&A transaction requires employing unique methodologies for each transaction. Support tailored to your scenario guided by our proven models allows us to deliver world-class solutions.
Building a strong M&A capability requires a strong foundation. A strong foundation has certain important characteristics:
- Acquisition and Divestiture Strategy: Treadstone consultants have years of experience helping companies develop strong M&A strategies.
- Deal thesis: A deal thesis that aligns with your overall corporate strategy is integral. This provides a unified vision and can help you target acquisitions with the greatest return for organizational objectives.
- Due diligence: Inadequate due diligence can cause M&A disasters. Strategic and commercial due diligence can help you identify sources of value and raise red flags. Having an experienced due diligence partner like Treadstone can help you make informed decisions and provide you with better leverage during negotiations.
- Post-Merger Integration planning: Merger integration is a surgical process that requires careful attention. Treadstone considers the socio-technical systems of both organizations to develop an integration plan that maximizes value.
- Post-Merger Integration execution: Once a plan is developed, the process of combining involves several systems including assets, people, resources, tasks and IT. Treadstone consultants focus on executing the strategy quickly, while understanding prioritization based on the client’s overall corporate strategy and deal thesis.
Treadstone’s mergers and acquisitions consultants help companies build and execute M&A models that are uniquely tailored to their needs and based on our proven methodologies.
Different Strategies for Different Objectives
Treadstone M&A consultants help transactions succeed. We provide superior returns by developing a uniquely tailored model based on our proven methodologies.
Our years of experience indicate that developing concrete institutional M&A policies can have a lasting impact on your acquisition activity. Policies must be tailored to your particular organization objectives and deal thesis. Your M&A policy is an important part of a long-term growth strategy. Treadstone’s experienced consultants help organizations develop world-class M&A strategies.
Successful acquisition requires careful consideration of acquisition screening:
- Your M&A strategy is a component of your company’s growth strategy. Crafting a successful M&A strategy requires understanding how it contributes to your overall growth strategy. The primary goal is not just expanding quickly. The goal is not just acquiring a target’s revenue. The goal is understanding what your acquisition target is doing well and implementing it across your organization.
- Articulate a comprehensive view of your M&A needs and growth strategy.
- Poorly defined M&A needs and growth strategy leads to an inability to achieve M&A objectives and growth goals.
- Understand your growth aspirations and how they translate into M&A objectives.
- Proper planning leads to successful acquisition. Planning starts long before an acquisition opportunity arises. A seasoned acquirer understands that their organization must be prepared and cultivate relationships with high-priority targets.
A well-defined strategy and M&A experience are important components of a successful deal.
Comprehensive strategic due diligence can reduce failed acquisitions. Strategic due diligence allows acquirers to understand the rationale for a deal and uncover potential value. Treadstone consultants have developed core principles to guide successful strategic due diligence:
- Use a prudent, systemic approach to strategic due diligence
- Determine target’s value based on in-depth understanding of financial metrics and cash flows
- Integrate comprehensive due diligence practices. Independent legal and financial due diligence is not sufficient. They must be conducted as an extension of strategic due diligence.
- Consider whether the potential value of the deal is realistic
Treadstone’s deal advisory team ensures that no two strategic due diligence transactions are treated the same way. Each deal has unique value drivers and thus the composition and approach for each strategic due diligence engagement is different.
Your legal, financial and strategic due diligence teams should work together closely. This is difficult when acquirers often hire several firms with different processes and systems. Our clients have the unique advantage of being able to receive support from a cross-functional team of deal experts. Our deal teams often contain experienced strategy, finance, and legal professionals. A collaborative, tested, and experienced cross-functional team ensures more successful deals.
Successful mergers and acquisitions require careful attention during the complex post-merger or post-acquisition integration phase (PMI). Success depends on acquiring the company’s ability to capture synergies throughout the PMI process. Although there are best-practices to help guide a successful PMI – successful integration is always a challenge. No two deals are the same. No two deals should be integrated the same way.
Having years of integration experience, Treadstone consultants understand how to create and implement an effective integration:
- Securely share and manage corporate data with internal staff, external advisors, consultants and regulatory agencies to finalize the integration process.
- Start early – plan well in advance. PMI planning requires careful diligence and foresight. It should start months before a deal is even announced, typically after signing the letter of intent.
- Take advantage of the virtual deal room. Extending your preferred virtual deal room (VDR) to include the PMI phase of the merger can create significant value in the PMI process. This provides security while facilitating collaboration.
- Culture is key. Considering the varying corporate cultures and integration processes has a lasting impact in PMI.
- PMI is a cross-departmental process. It is vital that a buyer retain, assess and assimilate information on sales and marketing, compensation plans, IT systems, etc.
Alliances and joint ventures offer many of the benefits of M&A without some of the drawbacks. They can ]enable an organization to enter a new market or fill gaps in their capabilities.
Strong Aliances and Joint Ventures strategy requires a repeatable model with clear objectives and a strong strategic foundation. The partners must be prepared for evolving scenarios and healthy integration. The right preparation prevents a host of potential challenges, such as unclear roles, slow decision making and an inability to resolve disputes.
Treadstone assists clients throughout the JV process. Whether it is developing a strategy, selecting the right partner, and structuring or implementing the deal – Treadstone consultants provide experienced guidance. We focus on the right structure from the outset. A unified vision and strong understanding between the parties leads to a successful alliances.
The Treadstone Advantage
Treadstone offers a modular services approach that can be inserted into any stage of the planning or implementation cycle, from inception of strategy development through to final execution. We understand that your business faces its own set of challenges and requires customized solutions to address those unique needs.
Whether you are looking to tap into a new market or implement your current strategic plan, Treadstone has the experience and insight to deliver superior results.