Briefly: Dealmakers share key traits: KPMG

(July 14, 2008) Even in times of weak growth and tough financing arrangements, some companies still manage to make good deals in the merger and acquisition market. According to KPMG, these firms share key characteristics that allow them to forge ahead.

“Our analysis reveals some specific steps that M&A teams can take to replicate the operating models of companies that are ‘champions’ at successfully creating sustainable value on a consistent basis,” said Christopher J. Gottlieb, KPMG transaction services principal.

Of the 160 U.S. and European companies surveyed by KPMG, the “champions” tended to spend one-third more time on their due diligence process than less successful companies, and kept a closer eye on results after the deal had been completed.

The more successful companies also committed 50% more staff to rotational programs into the new acquisitions, with these stints lasting, on average, 24 months, twice as long as among the less successful companies.

They were able to stabilize the acquired company one-third more quickly, and started budgeting for the integration during their due diligence phase.

“Companies are working to improve their internal M&A capabilities because the tougher financing conditions leave a smaller margin for error in any deal, and a softening economy is making it even more difficult to find revenue synergies in a combined organization,” said Gottlieb.

(07/14/08)

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