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. read less
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Episodes

THE TOP FIVE POST DEAL QUESTIONS FOR ANY CEO
Feb 3 2023
THE TOP FIVE POST DEAL QUESTIONS FOR ANY CEO
It's the first podcast for 2023 from your hosts Rob and Toby and in this episode, Toby focuses on the top 5 post-close questions a CEO needs to ask on any deal.  But before we start let's put the CEO's task into perspective.  He's just spent the best part of last year focused on the deal, the constant back-and-forth conversations, the massive efforts around due diligence, the stress of negotiating the final deal value, and then the task of ensuring that all the legalities are properly managed and signed of etc etc.There is, of course, the short-term elation when the deal is finally closed and ink is dry but it's short-lived, because before he can draw breath, that CEO is now faced with achieving the strategic vision, value, and synergies that were part of the deal thesis and a promise to the board and shareholders alike. Here's to another year of stresses that are stopping him from doing his day job.Well as Toby puts it, there is some relief that can be gained if the CEO approaches the post deal activities by asking 5 simple questions.Who is the integration manager for this dealAre they appropriately skilled and experienced for the task at hand?Is there a clearly defined integration strategy and plan?Who is managing the myriad of synergy opportunities that have been identifiedDo we have a strong governance program to keep everything on track?From Rob's point of view, these questions might come over as too simple, but in reality, they are the foundational questions that any CEO must be comfortable with if he/she is going to deliver the post-deal promise to the board and shareholders alike.And the final point in all this is that the CEO must not wait until the deal is closed before he tackles these questions. He should be thinking about these as soon as due diligence is underway. In fact the earlier one can consider these 5 important questions, the better.
LOOKING BACK ON SOME OF THE MOST DISASTROUS M&A TRANSACTIONS
Jan 2 2023
LOOKING BACK ON SOME OF THE MOST DISASTROUS M&A TRANSACTIONS
Well, this podcast was recorded in late November 2022, but a quick hospital visit so Rob could undergo full knee replacement surgery meant that we didn't publish until early January 2023. Still, knee surgery was successful, so here goes. And to help you navigate this episode, we refer to past episodes where we unpack some seriously disastrous M&A transactions, so if you want to know more about the detail of each of our 'top 5' then you'll find the links hereTwitter HP and Autonomy Daimler Benz and Chrysler Alcatant Lucent Royal Bank of Scotland In past episodes, Rob and Toby walked through a number of disastrous M&A transactions and a number of common factors started to arise on why these transactions had been so catastrophic. In some cases, it was down to the massive ego of the CEO or Chairman who railroaded transactions through a compliant board. In others, the deal thesis appeared to be nothing more than an excited scribble on a table napkin and very little thereafter. Others came down to massive cultural challenges or the simple reality that the idea might have sounded good, but the market wasn't interested. And in some cases, it was a combination of several of those factors. Do you agree with our 'Top 5' or do you have other examples to offer? And if you want to delve more deeply into each disaster, you'll find that we dedicated an episode to each of our top 5 so simply look through our episode history to find out more.Oh, I almost forgot. HAPPY NEW YEAR to our friends, colleagues and listeners around the globe. Here's hoping 2023 is a safe, healthy, and prosperous year for everyone and that your friends and family play a key role in every aspect of 2023.
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.