INDEX

Note: Figures are identified by f following the page number. Tables are identified by t following the page number. Endnote information is identified by n and note number following the page number.
accounting. See financial accounting
acquisitions
all-cash deals, 7f, 9–10, 266–270, 323, 324t, 325, 326–327, 330–331, 332t
all-stock deals, 7f, 9–10, 130–131, 133, 266–270, 323, 324, 325, 326, 327, 330–331, 332t, 334, 360n22
board questions, 270–274, 299
case study examples, 31–35, 109–116, 116–121, 130–141, 206–207, 218–219
combo deals, 9–10, 323, 326, 330–334, 360n22
delays, 108–109
due diligence, 51–87, 306–308
growth model examples, 247–250, 251–253
integration model examples, 181–184
post-close caveats, 224
premiums, 7f, 8, 9, 11–13, 15, 96–97, 98, 104–108, 109–122, 267–270, 309, 325, 326, 355n3
prioritizing and screening, 41–46
reactors, 19, 23–29, 30, 305
shareholder returns to acquirers, 4–6, 7f, 8, 9–10, 323–334
Shareholder Value at Risk, 265–270
strategy and prepared acquirers, 18, 19, 23, 26, 29–50, 305–306
strategy and “the acquisition game,” 8, 11–17, 24, 304–305
See also mergers and acquisitions; valuation
adjacent pathways
acquisitions pathways and cases, 31–35, 40–41, 38, 39f, 43, 75
deal classification, 290
affiliate marketing programs, 32–33
Affurr Industries (case study)
acquisition deal detail, 267–270, 271–272, 273
announcement of acquisition, 129
fact sheets, 111t
Homeland Technologies’ offer, 109–116
AI
data analytics applications, 74
products and development, 32, 34
Alexa (Amazon), 34
all-cash deals
shareholder returns, 7f, 9–10, 323, 324t, 325–327, 325t, 330, 331–334, 332t–333t
Shareholder Value at Risk, 266–270, 270t
stats and trends, 330, 363n3
total shareholder value added, 339t, 340t
valuation and risk, 271–274
allocated and unallocated costs, 84, 85
all-stock deals
shareholder returns, 7f, 9–10, 323–327, 325t, 326t, 330–334, 332t–333t
Shareholder Value at Risk, 266–270, 270t
stats and trends, 363n3
synergy shortfalls and failures, 130–131, 133
total shareholder value added, 339t, 340t
valuation and risk, 271–274
“always on” companies. See prepared acquirers
Amazon
bundled sales, 250
guiding principles, M&A strategy, 33–35
history and markets, 31–33, 34, 41
pathway development (acquisitions), 31–35, 41
technological disruption, 68
Amazon Web Services, 32, 34, 35, 41
analytics. See data analysis and analytics
announcements and Announcement Day
atmosphere, 2, 20, 123, 125, 144, 146–147, 150, 310–311
communication, 20, 123–125, 126–129, 130, 131, 132–138, 138–141, 141–144, 144–149, 149–150, 216, 310–311, 360n3
essential tests, 128–138
M&A data and studies, 4–8, 321–322, 328, 330, 335f, 337–338
model examples, 144–149
preparation, 141–144, 147–148, 307, 309–310
principles, 125–128, 310–312
real-life cases, 138–141, 144–149
stocks falling following, 2, 4–5, 7f, 21, 90, 107, 124, 131–132, 137, 301
stocks rising following, 132, 135, 138, 149
anti-trust regulations, 152, 153–154, 180, 361n1
AOL, 292, 296–298, 334
Apple, Inc., 35
asymmetry of information/knowledge, 311–312, 360n2
audits, financial due diligence, 53–56
Avis Budget Group, 134–135, 366n21

Baker, Doug, 182, 260–262
balance sheets, and financial due diligence, 55, 57
bankruptcies, post-acquisition, 1, 132
BearingPoint, 167–169
Beck, Christophe, 182, 218
best alternative to a negotiated agreement (BATNA), 27
BetzDearborn, 296–298
beverage industry mergers, 40–41, 138–141, 294–295
Bezos, Jeff, 31, 33, 41
biases
commercial due diligence to combat, 63
confirmation bias, 27
boards
duty of care, 263, 298, 300
M&A consideration and questions, 128, 263–264, 264–265, 270–274, 282–283, 299, 310
M&A rushes, 2, 25
M&A tools, 264–298, 300, 309, 310
post-merger integration, 274–282
strategic planning alignment, 38, 40, 49, 166–167, 293–294, 309–310
synergy trap avoidance and guidance, 21, 263–300
tempering influences, 25, 263
See also management and executives
bolt-on (deal classification), 165
booksellers, 31, 32–33
bottom-up operational due diligence, 77, 78, 79–83
bottom-up synergy targets, 201–202, 233
brand loyalty, 73, 357n5
Buffett, Warren, 98
bundling, 247, 250–251, 251–253
“business as usual” stage
deal thesis transition, 222, 226–230
graduation process, 231, 315
integration mistakes, 158
integration process, 171, 174, 187–188, 204
business models
acquisition pathways and, 31–36
customer-centric, 33–34
unorthodox acquisitions, 137
See also operating models
business plans
post-merger integration, 281–282
valuation as, 90, 92–93, 97
business teams. See cross-functional teams
buzzwords, 128

Cabbãge Corp (case study), 116–121
cancelling a deal, 52, 62
Capabilities/Market Access Matrix, 264–265, 290–294, 291f
capital expenditures (CAPEX)
DCF valuation, 92, 96
financial due diligence, 54, 60–61
capital investments
acquisition errors, 24, 25, 26–27
mergers and acquisitions as, 1–2, 15
outsourcing, 24, 26–27
by prepared acquirers, 23, 26, 29, 41, 305
carve-outs
integration workstreams, 174, 229
operational due diligence, 84–86
transition services agreements and, 220–221, 229
“cascade,” of M&A, 18–19, 19f, 303, 305
cash deals. See all-cash deals
cash flows
acquisition of, 76
financial due diligence, 58–59
reinvestment, 353
CEOs. See management and executives
change
agents, organizational, 215, 253–257, 261
communication tips and success factors, 210, 211–212, 215
employee experience to change management, 253–257, 316
integration, and operating models, 162–163, 189–191
integration communication and mistakes, 158–159, 208–210, 214, 277, 280
preparing for, 207–216
technological tools for management, 177, 219
Chemical Bank, 292
clean rooms and clean teams
customer experience transition, 245
data analysis and confidentiality, 153–154, 180
growth opportunities transition, 246–251
synergy work examples, 206–207
closing, 356n12
See also “Day 1”; post-close execution; pre-close planning
combo deals
shareholder returns, 9–10, 323, 325t, 326, 330–334
stats and trends, 363n3
total shareholder value added, 339t, 340t
commercial due diligence, 19, 53, 62–75, 277, 307–308
communications, corporate, 207–213
Announcement Day management, 123–125, 126–129, 130, 131, 132–138, 138–141, 141–144, 144–149, 149–150, 216, 310–311, 360n3
channels, 143–144
Day 1 management, 218–219
employee engagement, 207–217
employees, integration, 158–159, 168, 190–191, 207–213, 214–217, 219–220, 254, 255–256, 314
investor presentations, 128–138, 139–141, 283, 311
management methods, 126, 127–128, 133, 141–144, 146–147, 148–149, 190–191, 208, 210–216
words and terms, 128, 208–209, 214
company management. See boards; management and executives
comparable acquisitions (compaqs), 93, 265
comparable public companies (compcos), 93, 94f
competitive position, in commercial due diligence, 71–72
competitor assessment
competitor signaling, 37–38, 47
M&A strategy, 36–38, 39f, 41, 306
compound annual growth rates, 69
confirmation bias, 27
Conseco, 131–132
consultant services, 153, 222
contract management tools, 177
core business
acquisitions and consideration, 30–31, 32–34, 40, 41–43
deal classification, 290
financial due diligence, 56
corporate communication. See communications, corporate
costs
control, vs. revenue, 287–289
transition services agreements, 220–221
types, and achieving synergy, 243
types, and operational due diligence, 77, 79, 81, 84–85, 86
See also one-time revenues and expenses; premiums
cost synergies, 204
analysis elements, 77–83, 285–286
board decisions, 264–265, 287
capabilities/market access matrix, 290–292
discounted cash flow valuation, 89–90
expectations and timing, 76–77, 202
and integration planning, 160, 162–163
Meet the Premium Line, 285–288, 286f, 297f
model/error examples, 296–298
and operational due diligence, 76–86, 197, 308
organization design, and labor, 192–196, 199–200, 206
plausibility box, 288–290, 289f
revenue synergies vs., 198, 204, 244
synergy planning and teams, 199–200, 202, 237–244
top-down vs. bottom-up targets, 200–202
court cases, 94, 358n3
cross-functional teams
bottom-up synergy, 201–202, 280–281
employee management, 211
integration workstreams, 173f, 174, 178–181, 228, 229, 280–281, 313–314
cross-functional workstreams
integration planning, 177–181, 184, 313–314
post-Day 1 work, 187–188, 228
teams and activities, 173f, 174, 178–181, 229–230, 280–281, 313–314
cross-selling, 75, 198, 247–251, 251–253
culture
Announcement Day, 126, 216, 258
blamed for failed mergers, 25, 280
diagnostic tools, 176–177
Ecolab example, 215–216, 260–263
employee experience and change management, 207–216, 253–260, 316
employee experience and organizational communication, 208–209, 215
power and pervasiveness, 257–259
signals and symbols, 259
current market value. See market value, corporations
current operations value (COV)
acquisitions with premiums, 105, 106, 110–116, 309
EVA model development, 347–348, 351, 352
valuation, 101–108, 110–116, 117t, 118t, 309, 359n18
customer-centric business models
Amazon, 33–34, 41
culture and, 260–261
customer experience strategy, 244–246, 247, 248–250, 252
employee experience and roles, 211, 213, 261
M&A announcements, 148
synergy questions, 198
customer relationships
commercial due diligence, 68, 70–71, 72–73
cultures valuing, 260, 261
loyalty/“stickiness,” 72–73, 245, 357n5
workforce transition and decisions, 235–236, 315–316
customer service employees
changes and change management, 210–211
customer experience strategy, 245–246, 252

data analysis and analytics
clean room activities, 153–154, 207
commercial due diligence use, 62, 74
integration steps use, 277–278
operational due diligence use, 77–78
data confidentiality, 75, 78, 153–154, 180
“Day 1”
defining, 356n12
employee experience and prep, 208, 209, 210–213, 254–256
goals and aims, 216–218, 223, 314
integration management offices work, 169–170, 174, 175, 177–181, 187
integration strategy and planning, 156–157, 158, 166, 168–170, 179–180, 182–184
post-close execution following, 223–224, 226–227
readiness, following integration, 187, 190, 195, 200, 202, 205, 207–208, 210–213, 216–220, 314
readiness assessments, 213, 221
synergy work and timelines, 202, 205, 207, 217
deal classifications, 165–167, 175
deal thesis
business as usual transition, 222, 226–230
business plan and, 282
due diligence of, 52–86
integration planning and approach, 159–160, 179
integration planning examples, 181–184
operating model and, 161, 164
delays
in post-merger integration, 217, 279
reasoning and investor reactions, 108–109, 121–122
Deloitte Consulting, 167–169
Del Rio, Frank, 145
direct costs, 84–85
discounted cash flow (DCF)
improper use, and error potential, 89–91, 95–98, 99, 121, 308–309
sensitivity analysis, valuation, 96t
as valuation approach, 89, 91, 92–94, 97, 121, 300, 308–309, 343
Disney, 259
dis-synergy, 203
distribution, shareholder returns, 337–338, 337f
distribution capability, 70–71
diversification, 14, 145, 290
due diligence
commercial, 19, 53, 62–75, 277, 307–308
communications during, 126, 128, 149
financial, 19, 53–62, 81, 84–85, 220, 307
operational, 19, 76–86, 308
purposes, 51–53, 62, 63, 75, 76, 86–87, 306–308
reactors vs. prepared acquirers, 27–29, 41, 52, 305
duty of care, 263, 298, 300

earnings
acquisition decisions, 282–284
financial due diligence, 54, 56–60
earnings per share (EPS)
“drag,” 58–59
stock prices, and deal consideration, 25
Echo (smart speaker), 34–35
Ecolab
culture, 215, 260–263
“Day 1,” 218–220
growth, 251–253
as integration model example, 181–184, 215, 216, 218–220
synergies, 206–207, 238
economic value added (EVA)
background, 100–101, 343–345
calculation of, 99
improvements, 101–104, 105–107, 110, 112–113, 347–348, 350–352, 359n12
model development, 347–353
premium payment examples, 104–108, 110–116
present value of future EVAs, 100, 101, 347, 348, 351
valuation and synergy, 20, 90–122
valuation approach, 90, 91, 99–104, 309, 344–345
employees
announcements communication, 126, 128, 133–135, 142–144, 146, 147, 148–149, 152
change management, 207–217, 253–257, 316
contractors use, 193
culture, 126, 215, 257–260
direction and performance, 133–135, 152, 208, 210–212, 261
engagement and experience, 207–217, 253–257, 316
headcount synergy definitions, 203
integration communication, 158–159, 168, 190–191, 207–213, 214–217, 219–220, 254, 255–256, 314
integration methodology, 168–169, 191–197, 199, 254–255, 280–281
integration mistakes, 158–159, 208–209, 214
integration workstream staffing, 173, 174, 180–181, 228, 280–281
layoffs, 133–134, 214, 234–235
notification regulations and processes, 234–235
promotions, 261
as shareholders, and assets losses, 124–125
talent selection, following organization design, 230–234, 315
workforce transitions, 234–237, 315
engagement, employee, 207–217, 316
Enrico, Roger, 140
enterprise operating model, 188–189, 193
enterprise resource planning (ERP)
integration planning, 85, 157, 165, 167
system transitions, employee experience, 210–211
enterprise value (EV)
defined, 357n2
valuation approaches, 93, 94f
entertainment industry mergers, 259, 292, 296–298
Equations 11 and 12, 100–101, 343–345, 348, 368n1
equity market value, public targets, 283–284
EVA. See economic value added (EVA)
execution. See post-close execution
execution and synthesis, due diligence research, 66–67
executives. See management and executives

fairness
for employees, 233–234, 257
opinions, valuation, 93–94, 264, 275
Ferguson, Chas, 24, 109, 129
financial accounting
baselines, synergy planning, 199–200, 241–242, 243, 281, 314, 362n5
and financial due diligence, 53–62, 81, 84–85
M&A performance studies, 321
and operational due diligence, 79, 81, 82, 84–85
synergy tracking and reporting, 238, 240, 241–243, 314, 315
financial due diligence, 53–62, 307
vs. interim state, and TSAs, 220–221
within operational due diligence, 81, 84–85
financial planning and analysis (FP&A)
integration, 84–85, 173, 228–229
synergy planning, 197, 199, 228, 314
synergy tracking and reporting, 241–243, 242f, 314
fixed-share offers, 364n5
food and beverage industry mergers, 40–41, 138–141, 294–295
“football field” valuation, 93, 94f
forecasting
announcement returns and, 337–338
DCF valuation and, 95–96, 97
financial, with synergy tracking, 241–243, 242f, 294–295
free cash flows (FCF)
assumptions, and valuation, 91, 92, 95–96, 97, 98–100
components, 92
financial due diligence, 58, 60, 61
methodology, 99
functional operating models, 188–189, 192–193, 194–195
functional teams. See cross-functional teams
future growth value (FGV)
acquisitions with premiums, 105–107, 110–115, 119, 309
EVA model development, 347–348, 350–352
valuation, 101–108, 110–116, 117t, 118t, 120, 309
Future Industries (case study), 116–121

gambling, 11–12
go-to-market strategy, 63, 75, 246–251
Green Tree Financial, 131–132
growth opportunities
acquisition pathways, 33–34, 35, 36, 38, 40
due diligence, 51
market size and, 69–70
self and competitor assessment, 37, 38
shareholder value, 51
transitions to, 246–251
growth strategy
customer experience, 244–246, 247, 248–251, 315–316
M&A strategy for, 1, 17–18, 29–30, 33–35, 40, 41, 305–306
model examples, 251–253
revenue synergy, 63, 75, 244, 246–247, 249–251,
self-assessment, 37

headcount, synergy definitions, 202–205
Hercules, 296–298
Hilbert, Steve, 131
history, of acquisitions and mergers, 1, 3–8, 321–322
home automation systems, 34–35
Homeland Technologies (case study)
acquisition deal detail, 267–270, 271–272, 273
announcement of acquisition, 129
competitor assessment, 38, 39f
fact sheets, 111t
offer for Affurr Industries, 109–116
as reactor, vs. prepared acquisition, 23–24, 31
human resources (HR) departments
integration, 84, 189, 229
operational due diligence, 77, 81, 84–85
operation models, 189
transitions, and transition services agreements, 221, 229
See also talent selection, following organization design
hypothesis development, primary research, 65–66

IDEXX, 247–249
Iger, Robert, 259
IMOs. See under integration steps and processes
information asymmetry, 311–312, 360n2
information technology (IT) departments
integration, 84–85, 157, 167, 176–177, 228, 229
operational due diligence, 77, 81, 84–86
transitions, and transition services agreements, 221, 229
initial investor reactions. See investor reactions
institutional knowledge transfer, 235, 236–237, 315
insurance industry mergers, 136
integration steps and processes
costs and risks, 13–14, 28, 160, 162–163
governance, 161, 164–166, 169–171, 175, 177–179, 219–220, 222, 276–277
integration approach and principles, 159–169, 182–183, 222, 274–282, 312–314
integration management offices (IMOs), 20, 21, 157, 166, 169–184, 187, 190, 202, 205–206, 219, 225–230, 231, 239–240, 242–243, 280–281, 313
mistakes, 158–159, 222, 277, 280
planning basics, 154–159, 164–165, 179
post-close execution, 224, 225–230
pre-close planning, 20–21, 151–184, 231–234, 312
“rules of the road,” 164, 180
synergy planning, 197–206, 239, 313–314
tailored approaches, 279–280
valuation and, 90–91
workshops and tasks, 179–181, 192–193
See also post-merger integration (PMI)
interview and survey design, 66, 67
“investment opportunities approach” (IOA), 100–101, 343–345
investor presentations, 128–138, 139–141, 283, 311
investor reactions
to delays and premiums, 108–109, 121–122, 135–137
initial: as indicative, 5–8, 123–125, 302, 323–324, 328–329
initial: as non-indicative, 5–6, 25
initial: studies and data, 5–8, 124, 323–327, 324t–325t, 328–329, 336, 337f
to M&A announcements, 123–124, 128–138, 310–312
management knowledge sharing, 311–312, 360n2
See also shareholders

Jarrell, Gregg, 124

Kessel, Steve, 33
key performance indicators (KPI)
integration planning, 154
leading indicators, 240
Kindle (e-reader), 33
knowledge transfer, 235, 236–237, 315

Lab126 (Amazon), 33, 34
layer-by-layer approach, organization design, 193–194, 231–233, 314
layoffs
communication methodology, 214
in M&As, 133–134
notification regulations and processes, 234–235
leadership. See boards; management and executives
leakage, synergy, 198–199, 314
legal departments
clean room work, 153–154
integrations, 84–85, 173
talent selection review, 234
liability and negligence, in valuation, 94, 358n3

management and executives
board questions for, 299, 310
change management, 254–255
cross-reporting relationships, 211
integration executives, 170, 171–173, 175, 177–179, 182, 190, 218–219, 222, 277–280
investor relations, 360n2
M&A announcements and arrangements, 140, 144, 145, 146–147, 214–215, 254–255, 360n2, 360n3
operating model changes, 162–163, 188–190
organization design, 188–197
post-close execution leaders, 225–226
prepared acquirers, 38, 40, 47–50
screening processes and challenges, 44–45
strategic planning alignment, 38, 39f, 40, 166–167
synergy leadership, 197–206, 362n3
talent selection, 230–234
See also boards; organization design
Manufacturers Hanover, 292
manufacturing firm mergers, 162–164
Market Access Matrix, 290–292, 291f
market capitalization: acquirers and sellers
case studies, 267–270
M&A data and studies, 4, 322
market intelligence and analysis
commercial due diligence use, 62, 63, 64, 67–68
primary research, 64, 65–67
marketplaces, online, 32–33
markets
change and disruption, 68, 71–72
commercial due diligence, 62–75
competitive position, 71–72
diversification, 145, 290
growth opportunities, 63–64, 67–73, 75, 246–249
prepared acquirers, case studies, 31–33, 34, 39f, 41
reassessments, 67–68, 247
sizing, 68–70
market value, corporations, 347
acquisitions with premiums, 110–114, 118, 136
EVA model development, 347–353
mergers and acquisitions’ power to affect, 1–2
valuation methods, 92–98, 100, 101–103, 343–345, 347–353
Mazelsky, Jay, 248
media coverage, of acquisitions and mergers
Announcement Day management, 125, 127–128, 139, 142–144, 146, 147
pessimistic press, 1
media industry mergers, 132, 137, 292, 295, 296–298
Meet the Premium (MTP) Line, 264, 282–290, 286f
development, 283–286
failures, 296–298
successes, 294–295, 297f
usage, 287, 290, 293–298
mergers and acquisitions
acquisitions strategy and “the acquisition game,” 8, 11–17, 24
anti-trust regulations, 152, 153–154, 361n1
“cascade,” 18–19, 19f, 21, 303, 305
deal classifications and variations, 165, 175
due diligence, 19, 51–87
failures, 1, 2–3, 5, 132, 224–225, 296–298
lack of strategy, and effects, 2–3, 8, 14–15, 24, 281–282
myths, and reactor behavior, 25–26
process governance, 48–50, 161, 164–166, 169–171
shareholder returns, 4–6, 7f, 8, 9–10, 132, 135, 321–341
strategic choices, 38–45
studies of, and results reports, 3–8, 321–341
success factors, 17–18, 301–317
See also acquisitions; announcements and Announcement Day; integration steps and processes; post-close execution; pre-close planning; prepared acquirers; valuation
mergers and the employee experience, 209–217, 316
merger waves, 24, 25, 327
milestones and tracking, 240–241
Miller, Merton, 100–101, 343–345
mistakes
integration processes, 158–159, 222, 277, 280
“synergy trap,” 14–15, 303
Modigliani, Franco, 100–101, 343–345
Morrison, Bob, 140
monthly recurring revenue (MRR), 60
multiples approaches, valuation, 93–94, 282–284

Nalco, 181–184, 218–220, 251–253
negligence and liability, in valuation, 94, 358n3
Nelson, Ron, 134
net operating profit after tax (NOPAT)
calculating EVA, 99, 101, 102, 110, 111–120, 122, 309, 352–353
valuation and improvements, 90, 102, 108, 110, 111–116, 120–122
net present value (NPV), 13, 15, 267–268, 348–351
net working capital (NWC), 60–61
Nexstar Media Group, 132, 137, 295
non-cash adjustments, 54, 58–59
Nooyi, Indra, 140
normalized profit and loss, 55, 56–59, 61–62
Norwegian Cruise Line Holdings, 144–149, 173
notification regulations, 234–235

O’Byrne, Stephen, 344
one-time revenues and expenses
financial due diligence, 57–58
operational due diligence, 77, 79, 81–82, 84–85, 86
synergy definitions, 203–204, 243
operating models
change and integration, 162–164, 189–191
deal strategy and integration management, 152, 153, 154, 156, 160, 161–164, 165–166, 168
enterprise operating model, 188–189, 193
functional, 188–189, 192–193, 194–195
improvements and growth, 244, 248–250
interim/transitional, 210–211
operational due diligence, 76, 79, 80, 83
post-close execution, 226
See also business models
operational due diligence, 19, 53, 76, 308
for carve-outs, 84–86
cost synergy, 76–86, 197, 308
practical elements, 77–78
synergy-capture diligence, 80–83
top down/bottom up, 76, 77, 78, 79–80
organization design
leadership and execution, 188–197, 199–200, 235, 237
vs. operating model, 161–162
process options/choices, 193–197, 231–234, 314
roles focus, vs. people, 191–197
sign-to-close, 193
synergy planning teamwork, 199–200, 313–314
to talent design/workforce transition, 230–237, 315
visualization tools, 176
workshops, 192–193
out-of-period adjustments, 57

pathways, acquisitions
Amazon case study, 31–35, 41
core vs. adjacent business, 40–41
prepared acquirers, and strategy, 30–31, 33–35, 36–44, 49
vs. screening criteria, 42–43
patience, of prepared acquirers, 18, 35, 41, 47, 304
payoff distribution scenarios, 11–12
peer pressure, M&As, 24, 25, 27
PepsiCo, 41, 138–141, 294–295
“persistence spread” (investor reactions), 6, 7f, 302, 324–325, 331–332, 336, 337, 337f
Pixar, 259
planning. See pre-close planning; strategic planning; synergy planning
Plausibility Box, 264, 282, 288–290, 289f
PMI Board Pack, 264, 274–282
positioning, competitive, 71–72
post-close execution, 315–316
challenges and risks, 21, 223–225
five major transitions, 226–262
management/leaders, 225–226
timing, 224, 225, 230, 356n12
post-merger integration (PMI)
board work, 264, 274–282, 299
commercial due diligence for, 75, 277
payoff distribution, 12
planning and approaches, 151–184, 264, 274–282
plans, communication, 135–138, 152
technological tools, 176–177
timetables, 170–172, 276–279
See also integration steps and processes
pre-close planning
Day 1 readiness, 216–220, 243, 303, 314
integration management strategy, 20, 151–184, 231–234, 312
integration planning basics, 154–159
integration workstreams, 20–21, 170–171, 173–174, 175, 177–181, 187–222, 313–314
See also “Day 1”; sign-to-close
“premium at risk,” 269–270
premiums
acquisition announcements, 124, 127, 128, 129, 130–133, 134, 135–137
in acquisitions, 4, 7f, 8, 9, 11–13, 15, 96–97, 98, 104–108, 109–122, 267–270, 309, 325, 326, 355n3
case studies, 109–116, 116–121
discounted cash flow valuation, 89–91, 95, 96–97
investor reactions, 109, 121–122, 135–137
Meet the Premium Line, 282–290, 286f
positive and negative portfolios, trends, 325, 330
valuation and EVA, 104–108
prepared acquirers
benefits, 46–48
case studies, 31–35, 40–41
descriptions and qualities, 18, 23, 26, 29–31, 35, 36, 46, 305
due diligence, 29, 52
guidance, 19, 29–30
M&A strategy and governance, 18, 19, 23–50, 304, 305–306
reactors’ transformations, 36–46
Prestige Cruise Line Holdings, 145–149
primary research, in commercial due diligence, 64, 65–67, 72, 74
professional development. See training and development programs
profit and loss statements (P&L)
financial due diligence, 55, 56–59, 61–62
operational due diligence, 79, 81, 82, 84–85
synergy impacts, 243–244
pro-forma adjustments, 59
project management tools, 176
promotions, employee, 261
psychological needs, 209–210, 214, 253–254, 255–257, 316

Q&A documents, 127–128
Quaker Oats Co., 40–41, 138–141, 294–295, 297f

reactors
in acquisitions, 19, 23–29, 30, 305
behavior myths, 24, 25–26
transforming to “always on,” 36–46
readiness. See “Day 1”
recognition programs, 261
Reinemund, Steve, 140
research, in commercial due diligence, 64, 65–67, 72, 74
returns to shareholders. See shareholder returns
revenue synergies, 204
board decisions, 264–265, 287
cost synergies vs., 198, 204, 244, 288
and growth, 63, 75, 198, 246–247, 249–251, 288
Meet the Premium Line, 285–288, 286f
model examples, 294–295
plausibility box, 288–290, 289f
risk profiles
acquisition announcements, 360n3
acquisition processes and changes, 24, 26–29, 266–267
diversity, portfolio, 199
reactor behaviors, 24, 26–29
revenue vs. cost synergy, 198, 288
Shareholder Value at Risk, 265–270
risks and risk minimization
Day 1 issues, 218–219
due diligence aims, 52, 64, 79, 84
integration workstream steps, 177–178
organization design methods, 196–197
post-close situations, 223–225
synergy risks, acquisitions, 271, 272–274
“roles not people” focus, 191–197
“rules of the road”
integration, 164, 180
synergy, 203–205
run-rate adjustments/costs
financial due diligence, 59–60
operational due diligence, 79, 84, 86
run rate of synergies, 243–244

sales departments
conferences, 252
cross-selling and bundling, 198, 247–251, 251–253
customer experience and strategy, 73, 244–246, 248–250
go-to-market strategy, 75, 247, 249–250
integration, 14, 84, 152, 153, 167, 206–207
schedules. See time management
screening, in acquisitions
criteria, vs. pathways, 42–43
criteria examples and application, 44–45
M&A strategy, 37, 40, 42, 43–46, 305–306
synergy potential, 45
secondary research, in commercial due diligence, 65
self-assessment, 36–38
shareholder returns
to acquirers, 4–6, 7f, 8, 9–10, 323–334, 324t–325t, 328t–329t
distribution, 337–338, 337f
of employees, 124–125
from M&A, 9–10, 132, 135, 321–341
M&A data and studies, 4–5, 7f, 321–341
measurement tools, 322
to sellers, 10
time period comparisons, 327–338, 328t–329t, 332t–333t, 335f
See also Shareholder Value at Risk (SVAR)
shareholders
acquisitions and mergers’ economics, 14, 15, 266–270, 271–274
acquisitions and mergers’ negative effects, 1–3, 6–8
acquisitions and mergers’ positive effects, 6–8, 10, 48
Announcement Day communication and reactions, 123–150
total shareholder value added (TSVA), 10, 327, 338–341, 339t, 340t
trackable deal data for, 124, 129, 130, 132–133
See also investor reactions; shareholder returns
Shareholder Value at Risk (SVAR), 264, 265–274, 270t
Sheehan, Kevin, 145
sign-to-close
clean rooms, 246
organization design, 193
transition services agreements, 221
smart products and systems, 34–35
Smith v. Van Gorkom (1985), 94, 358n3
Snapple, 40–41
social media
announcements and management, 125, 144
due diligence, 74
Sook, Perry, 132
stakeholders. See employees; investor reactions; shareholders
state supreme court cases, 94, 358n3
Stewart, Bennett, 344
stock and stock prices
post-announcement drops, 2, 4–6, 7f, 8, 21, 90, 107, 124, 131–132, 137, 301
post-announcement rises, 6–8, 132, 135, 149
reactor behavior myths, 25
stock market crashes, 47
stock deals. See all-stock deals
Stuart, Andy, 145
strategic planning
“the acquisition game,” 8, 11–16, 24, 304–305
of communications, 125–128, 129–130, 141–149
deal strategy, 156–175, 179–181, 293–294
guidance, 3, 16–21, 316–317
integration: approach, 159–169
integration: basics, 154–159, 164–165
M&As without, 2–3, 8, 14–15, 23, 26–27, 282, 302–303
M&A within growth strategy, 1, 17–18, 29–30, 33–35, 37, 40, 41, 305–306
pre-close integration management, 20, 151–181, 276–277
process governance, 48–50, 161, 164–166, 169–171
reactor-to-prepared acquirer shifts, 36–46, 305–306
valuation errors, 15–16, 89–90, 95–96
See also prepared acquirers; vision, strategic
subscription revenue models, 60
survey and interview design, 66, 67
surveys, readiness, 213
switching costs, 73
synergy
acquisition and net present values, 13, 15, 267–268
acquisition announcement discussion, 130–133, 139–140
allure, and rush to M&A, 2, 8, 301
boards’ tools, 264–265
cost, and operational due diligence, 76–86, 197–198
definitions and measurement, 13, 203–305
vs. dis-synergy, 203
leadership teams, 197, 229–230, 234
leakage, 198–199, 314
nostrums, 8
post-close execution challenges, 224–225, 315
post-close execution methodology, 226–262
preparation and understanding, 14–15, 130–133, 136–137, 179–180, 281–282
retention: integration planning, 154–156, 179–180, 183
revenue, 63, 75, 198, 204, 244, 246–247, 249–251, 294–295, 288
rules of the road, 203–205
in sales, 246–253
targets, business operations, 188–189, 192–196, 197–206, 228, 231–234, 237–239, 241–242, 278, 281, 282
tracking and reporting, 237–244, 242f, 264, 278, 281–282, 294–295, 314, 315
trends and public opinion, 1, 3, 214
valuation and approaches, 89–122, 243, 284–290
workplans, 202, 205–206, 237–238, 239, 278, 314
synergy-capture diligence, 80–83, 197–198
“synergy-matching principle,” 14–15, 198
Synergy Mix, 264–265, 290–294, 291f
synergy planning, 197–206
post-close, 315
pre-close, 313–314
tracking and reporting transition, 199–202, 237–244
“synergy trap”
avoidance, board, 21, 263–300
mistakes, 14–15, 303

talent selection, following organization design, 230–234, 315
targets, synergy. See bottom-up synergy targets; synergy; top-down synergy targets
tax diligence, 53
teams. See cross-functional teams
technological change
commercial due diligence and, 68, 74
post-merger integration, 176–177, 219, 221, 253
subscription models, 60
system transitions, employee experience, 210–211
system use decisions, 157, 165, 167
technology industry mergers, 162–164
terminal value (TV), 91, 95, 96
time management
integration planning and action, 154, 169–170, 172, 175, 177–179, 180, 182, 205–206, 275, 276–279
post-close execution, 225
synergy work and timelines, 201–202, 205–206, 275, 278
See also “Day 1”
time periods, shareholder return reports, 327–338, 328t–329t, 332t–333t, 335f
Time Warner, 292, 296–298, 334
top-down operational due diligence, 76, 79–80, 82
top-down synergy targets, 200–201, 231–233, 281–282
total shareholder value added (TSVA), 10, 327, 338–341, 339t, 340t
training and development programs
employees, 210, 257
sales, 235, 252
transition services agreements (TSAs)
carve-outs and, 221, 229
cross-functional workstreams, 188, 229
operational due diligence, 84, 86
Trans Union Corporation, 94, 358n3
Tribune Media, 132, 137, 295, 297f
tuck-in (deal classification), 165

unallocated and allocated costs, 84, 85

valuation
acquirers’ shares, 271–272
commercial due diligence use, 62–63
discounted cash flow (DCF), 89, 91, 92–94, 97, 121, 300, 308–309, 343
due diligence processes, 52, 308
explanations and guidance, 20, 89–122, 309
fairness opinions, 93–94, 264, 275
methods and examples, 89–90, 93–94, 95–96, 343–345
multiples approaches, 93–94, 282–284
sensitivity analysis, 96t
Shareholder Value at Risk, 265–270, 283–287
strategic planning errors, 15–16, 89–90, 95–96
synergy, and approaches, 89–122, 243, 284–290
value. See current operations value (COV); economic value added (EVA); enterprise value (EV); future growth value (FGV); net present value (NPV); terminal value (TV); total shareholder value added (TSVA); valuation
virtual assistants, 34
vision, strategic
employee engagement, 208
employee experience, 209, 255
integration planning, 156–158, 162–164, 171–172, 187–188

walking away from a deal, 52, 62
watch lists
diligence, 52, 306–307
M&A screening strategy, 45–47, 305–306
weighted average cost of capital (WACC)
calculating EVA, 99, 101, 102, 103, 104, 358n10
DCF valuation, 91, 92, 93
stand-alone/combined companies, 110, 111, 117–118, 119, 358n10
workforce transition, 234–237, 315
working capital and capital expenditures, 54, 60–61, 92–93
workplans, synergy initiatives, 202, 205–206, 237–238, 239, 278, 314
workshops
integration planning, 175, 179–181
organization design, 192–193
workstreams. See cross-functional workstreams

Zipcar, 134–135, 366n21

..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.

Table of Contents for Index

Create new playlist

Sign In

Sign Up

INDEX

Table of Contents for
Index