COVER
TITLE PAGE
ACKNOWLEDGMENTS
ABOUT THE AUTHORS
INTRODUCTION: THE OPPORTUNITY, THE PAIN, AND THE PROMISE
1. Why Do M&A?
2. What Will You Learn From This Book?
3. Who Is This Book For?
4. Why Was This Book Written?
5. How Was This Book Written?
6. Who Wrote This Book?
7. The Professors, the Case Insights, and the Research Insights
8. Notes
Part I: The M&A Formula
1. 1 What Is the M&A Formula?
  1. Before the M&A Formula…
  2. Should You Build or Buy?
  3. Understanding Business Model-Driven M&A
  4. Success and Failure in M&A
  5. Notes
2. 2 Be Business Model Driven (Step 1): What Is Business Model-Driven M&A?
  1. Business Model Complementarity and Signals for Success
  2. Three Real Business Models: M&A Drivers and Complementarity Score
  3. What Are the Goldman Gates?
  4. How to Create a Target List Based on the Goldman Gates?
3. 3 Communicative Leadership (Step 2)
  1. Lesson #1 in M&A Leadership: Drive Hard with Soft Management Tools
  2. Lesson #2 in M&A Leadership: Create a Strong Foundation for Your People
  3. Lesson #3 in M&A Leadership: Silent People Are NOT Team Players
  4. The M&A Deal Committee
  5. Intent-Based Leadership
  6. Notes
4. 4 Take Ownership (Step 3)
  1. The M&A Playbook
  2. Governance in Corporate Processes
  3. CFA: Company-Specific M&A Engagement Letters
  4. M&A Launchpad
  5. Funding and Corporate Finance
5. 5 Accelerating Your M&A Formula: Digitizing M&A
  1. Strengthening the Formula
  2. The M&A Dashboard
  3. Digitizing: The Human Side of M&A
  4. Now, Science Meets Business
6. 6 Case Insights (CI) and Research Insights (RI)
  1. CI1: DSV: From Ten Trucks to €10bn
  2. CI2: RB: ‘King of OTC’ Improved Value Proposition and Client Relation as Business Model Driver in M&A
  3. CI3: Heritage Comes First at LVMH
  4. CI4: The Global Brewer: Driving M&A Growth One Beer at a Time
  5. CI5: Danaher: The Importance of Teamwork
  6. CI6: FrieslandCampina: A Merger of Equals or an Impossible Utopia?
  7. CI7: ASSA ABLOY: The Highest Total Return to Shareholders in Our Research Period (1st Jan 2007–1st Jan 2017)
  8. Notes
Part II: The M&A Formula Applied
1. 7 Next Steps
  1. M&A Reputation as a Tool for Success?
  2. Can You Build a Good M&A Reputation and Attract Sellers?
  3. Things to Avoid Internally—Bias
  4. Where to Get External Advice?
  5. FON-A-PAL—Building Your Resource Library
  6. What Do We Mean When We Talk About External Advisors?
  7. Financial Advisors/Investment Banking
  8. M&A Myth-Busting
  9. What Your Success Looks Like?
INDEX FOR CASE INSIGHTS & RESEARCH INSIGHTS
INDEX
END USER LICENSE AGREEMENT

List of Tables

Introduction
1. Table I.1 The M&A performance miracle
2. Table I.2 Four schools of thought in M&A research
3. Table I.3 The Global M&A Elite
Chapter 5
1. Table 5.1 M&A Dashboard
Chapter 6
1. Table 6.1 CI1: DSV operational excellence with cost as business model driver
2. Table 6.2 RI1: DSV—from ten trucks to €10bn
3. Table 6.3 CI2: RB (formerly known as Reckitt Benckiser)
4. Table 6.4 RI2: Improved value propositions and stickier client relations
5. Table 6.5 CI3: LVMH key resources and channels as business model drivers in M&A
6. Table 6.6 RI3: Key activities and resources—LVMH
7. Table 6.7 CI4: A global brewer with business model drivers depending on the M&A deal archetype
8. Table 6.8 RI4: Value proposition, customers, and cost
9. Table 6.9 CI5: Danaher with key activity (DBS) as business model driver in M&A^*
10. Table 6.10 RI5: Danaher with key activity as business model driver in M&A
11. Table 6.11 CI6: P + VP
12. Table 6.12 RI6: Cost in short term and value proposition in long term
13. Table 6.13 CI7: ASSA ABLOY—the winner of Global M&A Elite with M&A as key activity in the business model itself!
14. Table 6.14 Expectations for each type of deal (subject to size)
15. Table 6.15 Value propositions
16. Table 6.16 Value propositions—technology
17. Table 6.17 RI7: Business model-driven M&A at its best

List of Illustrations

Introduction
1. Figure I.1 The M&A Formula (see more on www.fixcorp.co)
Chapter 1
1. Figure 1.1 Business model drivers
Chapter 2
1. Figure 2.1 SME survey in the Business Model Canvas
2. Figure 2.2 DSV and M&A
3. Figure 2.3 Danaher and M&A
4. Figure 2.4 FrieslandCampina and M&A
5. Figure 2.5 Goldman Gates Scoring model
Chapter 3
1. Figure 3.1 Questionnaire to corporate executives in the Global M&A Elite
Chapter 4
1. Figure 4.1 M&A Playbook (see also www.fixcorp.co)
2. Figure 4.2 Acquisition Launchpad
Chapter 5
1. Figure 5.1 Business theories applied to M&A
2. Figure 5.2 Monitoring the focus and progress of your M&A
Chapter 6
1. Figure 6.1 DSV business model canvas
2. Figure 6.2 RB business model canvas
3. Figure 6.3 LVMH business model canvas
4. Figure 6.4 Global Brewer business model canvas
5. Figure 6.5 Danaher business model canvas
6. Figure 6.6 FrieslandCampina business model canvas
7. Figure 6.7 ASSA ABLOY business model canvas

“A down-to-earth description of how to run efficient and successful M&A and how to avoid failures.”

Johan Molin, CEO, AssaAbloy

“The basic idea of The M&A Formula is very interesting. Learning from successful investors in corporate M&A, the patterns and processes the authors use in applying them to their own acquisition plans is a fascinating concept. If a successful investor would not invest in an acquisition, it is probably a good idea for a corporation not to follow such a plan and vice versa.”

Günther N. Fuhry, Executive Vice President, Swarovski

“The M&A formula, from my experience, hits the nail on the head: simple principles with easy-to-use toolkits reflected against the theory. A must-read for all M&A professionals.”

Stefan Schneider, M&A Integration Expert, Editor in Chief M&A Review

“The M&A formula provides a useful, hands-on framework for successful M&A with numerous real life examples. A must-read for all those fascinated by M&A.”

Daniel Couvreur, Conference Board Director, M&A Council

“The authors present a comprehensive framework for achieving M&A success, and illustrate its value through a detailed and very insightful analysis of how the best and the brightest achieve sustainable success with M&A.”

Niels Bjorn Andersen, Professor Emeritus, Copenhagen Business School

“The headline ‘the opportunity, the pain and the promise’ describes the content at its best. The 50% failure rate of M&A deals must encourage any person in charge to wake up. This book woke me up, and made me change my views on M&A deals.”

Roland Wilcke, Officer with procuration, Günzburger Steigtechnik GmbH

“M&A is a combination of art and science. Advice on getting it right pays huge dividends in achieving the intended outcome of the deal, and The M&A Formula gets it right - it's a good book.”

Jacqueline D. Reses, Capital Lead and People Lead (CHRO), Square

“The M&A Formula provides a uniquely insightful and compelling analysis of a longstanding conundrum in mergers and acquisitions. In the M&A domain, the persistent popularity of the transactions counterbalanced against the often devastating destruction of shareholder value has puzzled investors for decades. Based on their extensive experience, the authors provide, for the first time, a formula drawing on large-scale bundled data analysis.”

“Proposing the innovative concept of TRA (total return analysis), The M&A Formula assesses the impact of a bundled set of M&A interrelated activities on corporate performance. Secher and Horley break through the logjam of analyzing individual acquisitions within short-term time horizons, to instead take a crucial longer term and programmatic perspective. Their findings, observations and recommendations are key, as M&A transactions are not isolated occurrences but rather systemic phenomena. With a fresh perspective, The M&A Formula provides a way forward for scholars and practitioners alike—highly recommended.”

Professor Kathleen Marshall Park, MIT Sloan School of Management

“A contemporary approach to the classic challenge of creating value from mergers and acquisitions.”

Professor, Dean Annette L. Ranft, North Carolina State University

“The M&A Formula has a singular purpose: to help managers improve their odds of better acquisition outcomes. The authors detail a sensible and experience-based three-step formula for M&A success. Systematic tools are explained for evaluating targets, managing the process, and dealing with external advisors and building internal M&A competencies. These tools are then carefully explained with case applications. I found their claims that every firm has an M&A reputation that can be used as a tool particularly insightful. And their frank and honest treatment of the role of financial advisors in M&A was refreshing. This book is a must-read for executives interested in improving their firms' M&A outcomes.”

Professor Bruce Lamont, Florida State University

“For me as a business student, The M&A Formula sheds light on a continuously growing sector and provides a very practical point of view on tactics that are successful in the real world.”

Wolfgang Höck, Student, Strategic Management & Law, MCI Management Center Innsbruck

“A must-read for anyone who is looking for a new model for successful M&A based on an outstanding combination of research and practical applications.”

Lena Scholz, Student, Strategic Management & Law, MCI Management Center Innsbruck

This edition first published 2018

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Library of Congress Cataloging-in-Publication Data

Names: Secher, Peter Zink, 1967– author. | Horley, Ian, 1965– author.

Title: The m&a formula : proven tactics and tools to accelerate your business growth / Peter Zink Secher, Ian Horley.

Other titles: The m & a formula

Description: Chichester, UK ; Hoboken, NJ : John Wiley & Sons, 2017. | Includes index. |

Identifiers: LCCN 2017037698 (print) | LCCN 2017045093 (ebook) | ISBN 9781119397922 (pdf) | ISBN 9781119397946 (epub) | ISBN 9781119397960 (cloth)

Subjects: LCSH: Consolidation and merger of corporations.

Classification: LCC HD2746.5 (ebook) | LCC HD2746.5 .S425 2017 (print) | DDC 658.1/62—dc23

LC record available at https://lccn.loc.gov/2017037698

Cover Design: Wiley

Cover Image: © billyfoto / iStockphoto

ACKNOWLEDGMENTS

In creating this book, we had enthusiastic meetings, interviews, feedback, and content from so many talented people. We are extremely grateful to all of them.

For the Research Insights that support the underlying formula for this book, our thanks to ‘the professors,’ whose years of research were summarized and applied to the Case Insights that give this book credibility and actionable advice. They are: Dr. Florian Bauer, Professor at Leopold-Franzens University Innsbruck; Dr. Svante Schriber, Associate Professor at University of Stockholm; Dr. David R. King, Associate Professor at Iowa University; and Dr. Kurt Matzler, Professor at University Bozen, Italy.

We appreciate enthusiastic leadership and innovation modeling from: Gareth Garvey; Alan Plaughman; former captain and bestselling author David Marquet. Data Collection and Research, Erik Elgersma (author: The Strategic Analysis Cycle) and Mads Jensen, Jensen Capital Management.

For the valuable Case Insights we thank our M&A panel, who were transparent and enthusiastic in opening up their experiences for us to share with you. Of the dozens of contributors, we especially thank: Cees ‘t Hart, the former CEO of FrieslandCampina; Jan Barsballe of ASSA ABLOY; Marc Koster from Heineken; Kurt Larsen of DSV; John Schultz of Verizon; Klaas Springer, treasurer at FrieslandCampina; and Johan Molin, CEO of ASSA ABLOY.

Finally, for the heavy lifting and support in editing, curation, and overall craft, we give special thanks to our writing partner and overall word guru, Kathryn Gaw, as well as the team at our publisher, Wiley.

Thank you everyone!

ABOUT THE AUTHORS

Ian Horley is an author, entrepreneur, and marketing strategy consultant for many SMEs. Ian's focus is on designing ‘product market fit’ programs to help merging companies grow better, faster, and cheaper.

Ian is a public speaker and a mentor to entrepreneurs, students, non-profit organizations, and educational institutions in Europe and North America. Ian's aim is to develop the M&A Formula into a movement targeted at transforming the careers and fortunes of the individuals involved in M&A, and is currently preparing the companion course at www.themandaformula.com to expand the mission's reach.

Photo of a middle-aged man with spectacles seen smiling widely at the viewer..

Peter Zink Secher is a former banker and corporate finance specialist with 25 years of experience on M&A sell-side. Peter moved to M&A buy-side as he started working for a former M&A client some 5 years ago. He has been involved in M&A projects in most parts of the world and is now running his own company; Peter's business motto is “half of your M&A success are all the deals you don't do.”

One of Peter's most important decisions in life was to take about 18 months out to devote time to his father and brother, who both tragically died of cancer in 2014. Spending time in a hospice made him understand that terminally ill people do not talk about work. They speak about the things that matter: family, hobbies, special occasions, and achievements. Make sure you achieve something in life—make a difference. Peter has published an article, and given speeches, about the terminal cancer stage.

Proven Tactics and Tools to Accelerate Your Business Growth