Statistics and media reports indicate that the success rate for mergers and acquisitions is about 50%. However, it is a little more complicated than that as the definition of success is rather subjective. Think of it as a sliding scale between complete failure and complete success. The merger or acquisition would be considered a complete success if all aspirations, identified benefits, cost savings and increased profits were realised. In the worst-case scenario, it would lead to the collapse of both businesses under financial strain.
In Mergers and Acquisitions: The case for early IT involvement, we present a compelling argument that the success rate of mergers and acquisitions can be increased by involving IT professionals in early stage discovery and due diligence before a final buying decision has been made. We liken buying an old house without a structural survey to buying a business without considering the IT implications.
Some businesses have the financial resources and operational capacity to absorb a bad deal but for many it could be catastrophic. This book provides thought-provoking questions to help identify potential integration issues and appraise the viability of the transaction from an IT perspective before contracts have been signed.
My co-author John Presland led numerous mergers and acquisitions whilst working for a number of different UK based insurance providers. In addition to my involvement with pre-acquisition due diligence with a German energy provider, I was part of John’s team in the insurance sector; giving both of us an in-depth understanding of the pitfalls and challenges.