In the field of corporate finance, we focus on the guidance of companies going through the processes of mergers and acquisitions.
Guidance in the event of mergers and acquisitions (M&A) comprises a lot more than optimizing the financial-strategic aspect of the transaction. The owners - especially when they actively participate in the company - have a very strong bond with their company.
Psychological guidance during the acquisition and sale process and the search for the corporate fit are also very important factors in the M&A process.
The task GECORP assumes in that process can be compared to the function of a Master of Ceremonies at a wedding. We reckon with the fact that the negotiating main actors have yet seldom very closely been involved with such a process. In addition, most of them prefer to further concentrate on their company during that process. A process that very quickly can take several months, from the moment it is decided to sell or to buy to the moment that the shares change owners.
Companies are motivated to pursue a merger or acquisition because they want to create value for the parties involved.
It is a strategy to realize growth by acquiring a market share, by getting access to new geographic markets and products, by mastering new know-how or technologies, by creating synergies, etc. The result is much quicker and less expensive than realizing those objectives by internal growth.
However, such a project requires an in-depth preparation and follow-up: Innumerable studies have already been made on the causes of unsuccessful mergers and acquisitions.
Below follow a number of the frequent pitfalls:
- lack of an appropriate strategy
- absence of a strategy
- cultural differences
- erroneous assumptions
- factors typical of the branch of industry
- inaccurate preparation on behalf of the buyer
- inaccurate research of the target
- erroneous appreciation
- too heavy financial burdens
- insufficient financial means
- insufficient attention for the integration project
- integration team lacks the necessary competences
- integration team lacks the necessary capacities
- lack of focus on the integration project as a result of which the switch to 'business as usual' is made all too soon