PCG has supported numerous acquisitions and organisational restructures across a broad range of industries. With the experience and tools to assist our clients to manage a successful M&A – from initial target acquisition screening through to post-acquisition integration support – we avoid the roadblocks and mitigate risk leading to failure.
Our Strategy capabilities include:
We assist companies through complex mergers, acquisitions and divestment by working to develop an investment strategy that meets fundamental criteria. Our objective is to ensure that CEOs, CFOs and board members develop a clear direction on their M&A needs and growth strategy.
The M&A strategy needs to identify the objectives and potential value of the asset to the company, and link to the company’s growth strategy.
As senior management and boards increasingly require more information and justification for acquisitions, the sustainability of the target’s business and post-merger requirements need to be thoroughly examined in order to make the deal a success.
Key to this success is developing an M&A strategy that provides value to the core business. By applying the screening criteria based on key financial and non-financial considerations, the list of initial potential targets is reduced to a manageable shortlist.
Target Screening and Valuation
We work with clients in the deal origination and provide all sourcing support: top-down industry reviews, identifying targets, creating company profiles and preliminary valuation.
When managed effectively, target screening and valuation ensures a successful transaction. A well-defined process increases the efficiency of a company’s M&A strategy, as many potential roadblocks to value are identified before resources are deployed to unproductive deals.
PCG Strategic Due Diligence is a forward-looking process with the aim of answering whether the deal should proceed and at what price. Our due diligence process involves the following:
We define the deal rationale by considering the scale and scope of the opportunity. In addition to revenue growth, our focus is on profitable outcomes. We consider the shape of the industry’s profit pool, identifying strategies that result in profitable growth, strength and sustainability of company earnings.
P&L Base Case and Projected Forecasts.
Key questions need to address the future P&Ls, consider if there is a realistic plan in place to achieve forecast financial results, and assess the base case, the downside and upside scenarios and associated valuations.
Three- and Five-Year Plans
As part of the process we consider key questions. Are the three- and five-year plans realistic and commercially focused? What are the key value driver initiatives? Are the earnings and earnings outlooks stable, and what are the key drivers of profitability across products and customer base?
Target Competitive Position
We look at the sources of competitive advantage going forward. How is the target positioned to compete and how successful is the strategy? What are the targets relative to industry performance on key profit drivers?
As part of the due diligence process, we consider consolidation and negotiation initiatives, standardisation and specification initiatives, as well as automation initiatives.
Synergy and Integration
Key questions need to be addressed. Are there plans to merge the target with another business? What cost and revenue synergies are realistic, given the size and timeframe? Are there revenue downsides and what is the plan and real cost and risk of integration?
Post Merger Integration
Following a merger, there are immediate challenges that need to be addressed, identifying the synergies and defining the critical strategic integration priorities.
PCG works on prioritising and supporting those functions that need to be integrated quickly. Merging two different company cultures requires rigorous action and follow-up across the organisation. Keeping employees focused on business and customers satisfied during the integration process is critical.
We bring a thorough and highly customised approach to the integration process that focuses on delivering value from the beginning.