M&A Strategy: Evaluation of the fit of a target

Mar 31

THIS IS THE FREE, REDACTED VERSION OF THE TASKS IN THE M&A REFERENCE MODEL  AND IT IS LICENSED UNDER Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International THE FULL SET OF DATA HAS TO BE LICENSED COMMERCIALLY.  HERE is a full model example for one task.

The task has the following goal(s):

Buyer-target complementarity: analyzed

The task has the following objectives:

Risk: minimized

Information asymmetry: minimized

Synergy: maximized

Short description of task Evaluation of the fit of a target:

Assessing how well companies fit together strategically calls for a careful consideration of many important dimensions that can impact the success of the integration process.

The task uses the following business object types:

Complementarity of the strategy, Complementarity of the GTM model, Cost Complementarity, Product complementarity, Complementarity of countries, Market Complementarity, Supply chain complementarity, Buyer-target complementarity, Target, Shortlist of targets.

Questions to be used during the execution of the task

The task is executed with the following questions, among others:

What are the details regarding the strategic fit of the target with the buyer regarding strategic goals?
What is the fit regarding strategic capabilities of the target with the buyer?
What are the business models of the target and how do they fit the buyer's business model portfolio?
Are we planning to continue/alter/sunset products, services or business models of target or buyercompanies ?
What is the resource model of the target?
How does the resource model of the target fit ours?
What is the operational model of the target?
How does the operational model of the target fit ours?
Does the operational model of the target scale to our needs?
How does the resource model of the target (e.g. people, suppliers, IT, technology) fit?
How does the supplier ecosystem fit with our ecosystem?
How does the customer ecosystem fit with our ecosystem?
How does the employee ecosystem fit with our ecosystem?
What is the culture fit of the target with the buyer?
What did we learn from the meetings with the potential target companies?
Did all assumptions about the targets undergo a reality check?
What is the risk for the buyer regarding each of the different companies on the list?
Were dissynergies considered in addition to the synergies?
How would we deal with overlaps, misfit of the potential targets with the buyer company?
What are the target company's financial and tax reporting practices, and how do they compare to the acquiring company's practices?
What are the key stakeholders of each company, including shareholders? How will they be affected by the merger or acquisition?

THIS IS THE FREE; REDACTED VERSION OF THE TASK IN THE M&A REFERENCE MODEL: THE FULL SET OF DATA HAS TO BE LICENSED

strategy

Karl Popp www.drkarlpopp.com