Inorganic growth is an expensive, high risk prospect. However, a successful M,A&L track record is often required to maintain consistent growth and market leadership. Springhill Consulting Group recognizes that multiple levels of due diligence must be applied to minimize both the operational and financial risks associated with inorganic growth. We help our clients analyze mergers, acquisitions, and licensing with detailed inspection of the critical assumptions that underwrite these efforts. Our approach is fast, focused on the critical issues to enable objective decision-making and planning.
We help clients through three areas:
- Decision Support
- Target Identification and Screening
- Strategic Due Diligence and Value Assumption Testing
Springhill Consulting Group helps answer the question, “Is merger, acquisition, or licensing the best approach to capture growth?” Decision Support engagements are not intended to craft an “M,A&L Strategy”, but rather determine if inorganic growth options will yield better results than alternatives (organic growth, partnership, status quo).
In the quest to make informed “Build vs. Buy” decisions, we work with clients to review their growth goals, strategic options, and possible tactics, to help assess the likely return on investment associated with each method of growth. Ultimately, our proven framework and objective analysis allows clients to move beyond emotional considerations and select the growth option(s) that offer the most value to the organization.
Target Identification and Screening
One of the critical steps to achieving growth through M,A&L is to identify the best opportunities. The best opportunities are not necessarily the largest or the most well recognized. Often, the best opportunities are not even ones considered at the outset. The best opportunities are those that will most effectively serve the growth objectives. These can be large or small, local or global, functionally strong or weak, etc. Thus, a key to success is identifying all possible opportunities and then determining which opportunities offer the best fit.
Our bottoms-up approach ensures that our clients are aware of and consider all potential M,A&L candidates. Then, based on a set of agreed-upon screening criteria, we analyze each opportunity to determine which will be most effective in meeting the organizations growth goals and objectives. Finally, we support a prioritization process to determine which opportunities meet growth goals and are a good operational fit with our client. At the conclusion of this effort, our clients can be confident that no opportunities have been ignored and that a defendable list of priority targets is developed.
Strategic Due Diligence And Valuation Assumption Testing
Often, identifying acquisition targets is exciting and, as a result, emotions are high. When these emotions are based on assumptions, it is important to test those assumptions with facts, not “SWAGs” hidden in smart-looking presentations or sophisticated financial models. Springhill Consulting Group helps to collect the critical facts used to support or refute the strategic and financial assumptions. Typical areas of analysis include investment requirements (people, technology, capabilities); go-to-market strategy; customer relationships; cost structure; etc. With the facts in-hand, we help our clients not only understand the target company but what opportunities truly exist to create value through synergies, including productivity gains and combined growth opportunities. In addition, we help to identify major areas that can create barriers to strategic plans and/or destroy value such as “fork-lift” technology changes, incompatible manufacturing or development capabilities, geopolitical risk, customer retention, culture, etc. Our outputs affirm or refute key assumptions allowing for critical and informed adjustments to the strategic plans and valuation model.