M&A STORIES - The Good, The Bad and The Ugly

Robert Heaton & Toby Tester

These M&A War Stories podcasts are for anyone engaged in M&A or Divestment activity. Every week your hosts Robert Heaton & Toby Tester, along with special podcast guests, will draw on their past M&A experience through case studies and what hopefully will prove to be interesting stories. By chipping in with our own thoughts and experiences our aim is that all of us professionally involved in M&A – CEOs, CFOs, Executives, Consultants and Advisors, get that little bit better next time round.

A CONVERSATION WITH PTS CONSULTING FOCUSING ON TECHNOLOGY IN M&A
Nov 18 2022
A CONVERSATION WITH PTS CONSULTING FOCUSING ON TECHNOLOGY IN M&A
In today's episode, I'm joined by Barry Lewington and Hugh Van Wijk from PTS Australia to talk about their experiences in managing the technology integration (or separation) aspects of M&A.   We will be recording more podcasts with PTS in the future but from today's episode, there are several takeaways from our conversation.Technology integration can be a large part of any M&A integration and in most cases, it can be complex and involve many moving parts.The technology per se is a small part of the issue, people, governance, data and operations security, transition services agreements (TSA's) and regulatory approvals are some of the critical factors that need to be considered.Like all other parts of M&A integration, the technology aspect needs detailed planning and the most appropriate starting point is the deal thesisIn addition to technology skills, strong communication skills are a vital skill set to make sure everyone understands what's happening. how they are involved or impacted, and as a mechanism to provide assurance to all parties.And finally, in today's environment, technology is a critical component of business, so a critical expectation that PTS encounters is that when a system transition or integration legally completes at midnight, all operating systems have to be up and running in the new environment at midnight + 1 second.  About PTS PTS  is a global technology consulting business with 35 years of experience delivering world-class IT solutions to some of the world’s leading organisations. They help clients better align their IT, Business and Real Estate strategies by transforming the workplace through technology and by optimising their Data Centre environment.
EXPLORING VALUE CREATION - INNOVATION VERSUS THE BLEEDING OBVIOUS
Aug 1 2022
EXPLORING VALUE CREATION - INNOVATION VERSUS THE BLEEDING OBVIOUS
So in today's episode, Robert and Toby continue their conversation around value creation in M&A, but this time taking a more philosophical approach to the factors that impact the desire to go after value that is beyond what Rob defines as the 'bleeding obvious'By 'bleeding obvious' Rob is alluding to the usual synergies, cost reductions, and efficiencies that result from typical M&A deals, and whilst achieving these can be stressful on the organization, the pathway is based on proven methodologies that are well trodden.But then there is the innovative value that can be derived from M&A and in many cases that area has a lesser pursuit. Why is that?Robert and Toby ponder whether it's because the organization is exhausted after dealing with the post-deal shenanigans or whether CEO's are risk averse and don't want to push value creation too strongly at the risk of their performance bonuses etc.But maybe it's determined by the 'style' of CEO at the helm. Some are clearly focused on delivering consistent performance, whilst others are more 'entrepreneurial' and willing to take greater risks.And maybe it's just that two teams are needed. The initial team that goes about achieving the bleeding obvious, with a second team swinging in slightly behind team 1 to pick up on the more creative/innovative themes and drive that additional 'buried treasure' that Toby often refers to?The answer will always depend on many factors, and in fact could be a combination of all three scenarios that the dynamic duo talks about, but the fact remains that many deals stop at completion of the integration phase, and a lot of additional value creation remains buried.What do you think? Have you got examples where that elusive innovation value has been uncovered? Do you want to come on a future podcast episode and talk about it? Let us know - you know how to find us.
THREE PHASES OF VALUE IN M&A - PROTECTION - CREATION - INNOVATION
Jul 12 2022
THREE PHASES OF VALUE IN M&A - PROTECTION - CREATION - INNOVATION
You might recall in the last podcast, that Robert and Toby got on a roll in talking about value creation during post-M&A integration so you won't be surprised that this is the topic for today's podcast.The Dastardly Duo hold firm to their belief that insufficient attention is paid to real value opportunities beyond what Rob describes as the 'bleeding obvious' And you'll hear Toby berate Rob for not respecting the huge amount of work that goes into identifying value opportunities.But I digress because in this episode Rob and Toby start to explore what they call the Three Phases of Value Creation and reaffirm their belief that more can be done to realize post-deal value. Moreover, Toby proposes that there is an additional function needed that he calls the VMO (Value Management Office) and you can read more about that idea hereAnd finally, what are those Three Phases?Value Protection: Taking action to make sure that the value identified in the deal thesis is fully realized and that mistakes or poor decisions don't arise that would erode value.Value Creation: Which is what Rob refers to as 'Bleeding Obvious'. This is the value derived from synergies, operating efficiencies, cross-sell and up-sell potential, organization restructure, and systems/process efficienciesAnd lastly Value Innovation: The opportunities that present themselves once the two entities have been integrated and the combined strength of the whole opens up previously unseen potential. As always, we hope you enjoy our podcasts and we invite you to comment if you have something to offer or indeed disagree with our observations. Lastly. let us know if you have a story to tell and we would be delighted to have you on the podcast as our guest.
THERANOS - THE EMPEROR HAS NO CLOTHES
Mar 23 2022
THERANOS - THE EMPEROR HAS NO CLOTHES
If you listened to the press this past year you must have heard snippets about Elizabeth Holmes, the young, attractive and charismatic  CEO of Theranos, and how she fleeced rich and savvy people out of almost a billion dollars. It's a topic that Rob and Toby have been mulling over recently and particularly wondering just where in the journey did Elizabeth turn to fraudulent claims and did she do so knowingly?From what we know, she started out with a genuine vision/dream to disrupt the blood-testing industry with a machine that could provide blood analysis from a single pinprick and in the early years, there seems to have been a lot of effort into achieving that dream. But somewhere along that journey it would have become obvious that the technology wasn't going to work and that's when Elizabeth's pathological desire to succeed turned to fraud.The bottom line seems to be that she had a sociopathic disorder that allowed her to believe in her fraudulent claims, but it doesn't explain why such savvy people parted with their money so easily. Was it because they thought they were being invited into a secret and highly exclusive club? Did the fact that well-known people had already invested cloud their judgment?  Who knows? What we do know if that even basic due diligence would have set alarm bells ringing so I guess that leaves us with two take aways from the Theranos story:If it looks and sounds too good to be true it probably is.Simple due diligence should be a prerequisite before you hand over your well-earned cash.