This year has seen a resurgence in deal–making activity
around the world. This resurgence is being fueled by cheap debt,
increased boardroom confidence and the return of growth after the
2008 financial crisis. With this growth in activity comes increased
pressure to ensure that the deals completed generate the maximum
value as competition and pricing are running high. With the
question of what separates the deals that capture value to the
deals that do not, Crowe Horwath LLP and Mergermarket teamed to
develop a recent study in which corporate deal-makers divulged
important differences between successful and unsuccessful
transactions – Steering Successful Growth: Value Capture in
M&A (the Report). The partners interviewed
over 100 corporate executives about their most recent deal activity
– looking at what the acquiring companies set out to achieve,
the processes they used, and whether they deemed the deals
successful or not in terms of capturing value.
Key findings include:
The successful transaction
professionals succeed in prioritizing resources and effort around
highest value-capture initiatives 91% while their less successful
peers only achieved this 67% of the time.
Half of successful deal-makers used
an integration scorecard compared to only 37% of unsuccessful
Only 11% of successful deals were
cross-border, compared with 33% of unsuccessful deals.
Proper focus throughout the M&A
transaction value chain can help companies achieve greater
With the last finding, the Report goes into depth on how the
deal process works, specifically, how it should work to capture the
best value. The Report emphasizes that looking at the deal process
as a "value chain" can help deal teams properly
understand how each stage of an acquisition functions and is
connected. The Report states
the M&A transaction value chain model not only makes the
steps of the deal explicit and clear – but it also speaks to
the fact that the ultimate value of the deal can be either
supported or undermined at each stage.
The M&A transaction value chain is broken down into the
In conjunction with the M&A transaction value chain, the
Report identifies seven aspects of any merger or acquisition that
they view as constituting the foundation of good deal execution
which should be applied endlessly during all phases of the value
chain. The Report refers to these aspects as the seven pillars of
M&A success being: structure, governance, and accountability;
strategic clarity; execution efficiency; operating continuity;
synergy capture; people/culture management; and scalable
With the rise in deal volumes, the availability of cheap debt
companies are feverishly seeking and striking deals, however, what
must be kept in mind is that there is a high expectation that these
deals drive value for shareholders. Doing this requires groundwork
and planning which comes in many forms. The deal rationale needs to
be considered carefully, procedures placed to maximize the
efficiency of the deal process, and deal-makers need to be engaged
and obtain the appropriate assistance throughout all of the stages
of the M&A transaction value chain.
Norton Rose Fulbright Canada LLP
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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