Insights From Analyzing Merger Cases

When I first started doing this work, I’d just do what the Client asked for. Until I had this case: We once had a Client invest $XX million in a company where the Client wanted to go fast and only focus on red flags - a basic check list to get the deal over the line. Six months later, all hell broke loose: - Payments delayed with flimsy excuses - Partners complaining about breach of contract - Promises of buying inventory that never happened Turns out, this company had a history of fleecing partners. And now our client was tied to the mess and had to clean it up. What I learned: A track record of burning bridges won't show up on a check list approach. Sure you might be able to find some litigation in the public record, but the company could chalk that up to the normal course of doing business. To catch these problems, you need to dig deeper: 1) Reference checks with past partners, not just the cherry-picked ones 2) Litigation searches for contract breaches, judgements, complaints. Where litigation databases are not available, do the manual records retrievals (despite some taking up to 2 weeks). Where even that is not available, do discreet source inquiries! 3) Forensic analysis of financials for cash flow issues or payment inconsistencies Real investigative due diligence means vetting how a company operates inside and out, and preventing surprises from showing up. #dealintelligence #duediligence #PrivateEquity #mergersandacquisitions

M&A activity is accelerating in 2025 with deals like Aviva 's £3.7bn Direct Line takeover and the $22.5B ConocoPhillips Marathon Oil merger reshaping industries. But did you know that 33% of acquired employees leave post-acquisition, and culture misalignment is the #1 reason acquisitions fail? AI ALPI analyzed 75+ major acquisitions this quarter and found that HR involvement from day one of M&A discussions increases success rates by 40%. The most successful deals all shared one thing: CHROs were equal partners with CFOs during due diligence. Key insights for HR leaders: → Pre-merger involvement is crucial: It makes good business sense to involve HR earlier because we provide a different point of view and will ask different questions → Culture fit predicts success: Companies with high employee-engagement scores are 3x more likely to achieve post-merger synergies. Smart acquirers review Glassdoor scores before making offers ↳ 65% of 2025's healthcare M&A deals focus on therapeutic specialization rather than scale, requiring careful talent retention strategies → Speed matters: The integration timeline should be as short as possible. The quicker you integrate the two businesses the better While 59% of CEOs now prioritize acquisitions over organic growth (up from 42% in 2024), only 22% of companies use specialized M&A workflow software for people integration! 🔥 Want more breakdowns like this? Follow along for insights on: → Getting started with AI in HR teams → Scaling AI adoption across HR functions → Building AI competency in HR departments → Taking HR AI platforms to enterprise market → Developing HR AI products that solve real problems

There's much discussion about M&A, but let's focus on the M - mergers. Sharing my experience below. 👇 Mergers typically involve equity splits within 40/60 or even 30/70. I've worked on mergers from both the operating and investment banking sides, across public and private companies. In my experience, these are the key challenges: 1. Diligence: Particularly challenging as companies are often competitors. Sharing data becomes complex. One one deal between public companies, we had to coordinate opening data rooms at the exact same second because neither side trusted the other to follow through! 2. Defining ownership splits: a. Public companies face constant share price movements during negotiations and the again between signing and closing. Even with established collars (agreement that deal terms stay fixed if movement is under 10%), we often exceeded these limits before signing. One unique advantage of public company mergers is you have analyst consensus forecasts that are unbiased, credible ways to set merger ownership ratios. Using management forecasts means each side has an incentive to show hockey stick growth. b. Merging private companies typically results in the most recent valuations not from the same date, making using valuation a difficult metric to use. Example: "Your valuation is from the peak of 2020, it's not real, ours is from the depths of 2023." The company with higher revenue typically wants to define ownership by revenue split (e.g., "$100M revenue versus your $80M means we should own 56% of the combined company"). If you're more profitable? That becomes your preferred metric. 3. Non-deal terms like choosing the new company name, which headquarters is the new headquarters, and of course every employee role is at risk because now you have 2x of everything. 4. Board and management structure: Some mergers arise when there's a departing CEO with no clear successor, which simplifies the hardest management decision. Even with a clear CEO candidate, questions remain about Chairman, COO roles, and board composition. Folks ready to retire makes that role selection easy, I recommend round robin for the rest of the roles (Chairman from company A, CEO from company B, CTO from company A, etc.) Despite these challenges, consider exploring mergers with competitors and partners: 1. Combine smaller competitors to create a market leader 2. Merge with your largest partner 3. Combine to achieve the scale that's required to go public Questions? Have merger experience? Please share in the comments below.

Here’s the truth: Deals win or die by what happens after close. M&A isn’t just about numbers. It’s about envisioning the end state. I’ve seen too many deals get done for the wrong reasons—chasing revenue, ego, or momentum—without ever asking: What do we want this to look like after the dust settles? That’s why Buyer-Led M&A flips the script. We lead with clarity, not chaos. 🔹 Start by mapping the end state. Not just the financials—think operating model, customer experience, and decision-making structure. What does “success” actually look like? 🔹 Then dig into culture. Forget the surface-level values page. You need to understand how decisions get made, how people work, and how priorities shift under pressure. That’s the real culture. 🔹 Now you can start building a joint go-to-market plan. This is your integration thesis. What does the customer experience look like as a combined company? 🔹 Integration planning should run parallel to diligence. Same team. Shared information. Continuous learning. That’s how you get to Day 1 readiness—and avoid repeating diligence after you’ve already bought the company. 🔹 Finally: reverse diligence. Let the target get to know you. This is a two-way street. The more transparency, the more alignment, the more likely you’ll retain the people who actually make the deal work. M&A isn’t a race to term sheets. It’s a race to value creation—and that starts by leading the process, not just following it. This is how I define the Buyer-Led M&A™ mindset. What am I missing? Let me know in the comments. #MergersAndAcquisitions #BuyerLedMA #DealRoom

Most bank mergers fail to reach their projected potential. Not because of poor execution, but because they're solving yesterday's problems. OK, the execution was poor too. Jim Perry offered this insight on my “New Rules of M&A” post (see comments): 'M&A that focuses on complementary strengths, combined with technology to boost operational efficiency, can work hand in hand to promote profitable growth.' He’s right. Except, I’ve heard time and again from CEO’s they spent millions of dollars integrating two "complementary" banks only to discover they'd created a bigger version of the same problems. This isn't surprising. Most bank M&A conversations start with "cost synergies" and end with disappointment. The old playbook says combine operations, consolidate branches, reduce headcount. But here's what nobody wants to admit: The efficiency gained from traditional M&A rarely offset the true cost of integration.  I watched a $2B bank spend over a year merging their legacy tech stack with an acquired bank that was on the Core Provider. By the time they finished, both systems were even more outdated. Meanwhile, I’ve seen banks use M&A as an opportunity to rethink their products, technology, people, processes to align around a combined vision and differentiated strategy for the combined entity. The new rules of bank M&A:  1. A differentiated strategy based on the complementary strengths is paramount  2. Cultural alignment beats cost synergies  3. The ability to transform matters more than short term performance  One bank chairman told me: "We used to acquire for deposits. Now we acquire for capabilities."  Here's my prediction: By 2026, we'll see more banks acquired for their technology and talent than their deposit base. The winners won't be the biggest banks, but the ones who figure out how to scale with a differentiated strategy.  What outdated M&A assumptions is your bank holding onto?     #BankingInnovation #FinTech #CommunityBanking 

In M&A, most sellers assume diligence begins 𝙖𝙛𝙩𝙚𝙧 the LOI is signed… But by that point, the clock is already ticking, exclusivity is locked in, and any surprises (real or perceived) can become deal-breakers or issues that chip away at price. The truth is, buyers walk in with a very specific checklist. They’re not just verifying financials, they’re looking for risks, for inconsistencies, and sometimes, for anything that gives them leverage, or even a reason to walk away. Here’s the good news: if you’re the seller, you can beat them to it. It starts with understanding what buyers are looking for: 🔎 HR and compliance gaps 🔎 Messy or incomplete contracts 🔎 Unclear financial adjustments or owner add-backs 🔎 Potential unresolved tax liabilities 🔎 Customer concentration risk 🔎 Unresolved litigation or contingent liabilities 🔎 Cap table confusion or unresolved equity promises These aren’t just technical details, they’re signals to the buyer, and in an M&A process, well-prepared diligence wins deals. What can sellers do? ✅ Assemble your own diligence checklist before buyers do. A good M&A advisor will help you do this during the preparation phase ✅ Have your financials reviewed or normalized by a third-party QofE provider ✅ Clean up contracts, org charts, cap tables, and compliance documentation ✅ Identify “gray area” risks early and prepare thoughtful explanations ✅ Think like a buyer, then remove any friction. Make it easy to buy your company. In diligence, the goal isn’t perfection, it’s being able to give the buyer confidence. When a buyer feels like you’ve done your homework, the dynamic shifts. You’re no longer defending surprises. You’re leading the deal with transparency and strengthening the value you’ve worked so hard to build. #mergersandacquisitions #Investmentbanking #MandA #exitplanning

EBITDA isn't everything. Recently, I had an enlightening conversation with a business owner who was contemplating a merger with a partner service provider. On the surface, the synergy seemed promising — two companies of similar size, complementary services, and a shared history of collaboration. However, as we delved deeper into the financials, we uncovered critical insights that could have easily been overlooked. While revenue and earnings are often the main early focus in M&A discussions, we discovered that the cash conversion cycles of the two businesses were markedly different, one business was using expensive debt (with no returns, revenues were falling), and differing strategies on operational expenses. Key takeaways: 💸 Cash Conversion Cycle Matters: It's vital to understand how quickly a business can convert its investments into cash flow. A lengthy cash conversion cycle can signal inefficiencies that can derail potential synergies post-acquisition. ⚔ Debt Usage is Double-Edged: While debt can fuel growth, mismanagement or the wrong debt can choke it. Analyzing the debt levels and capital structure is crucial to assess the potential risk and financial stability (and potential opportunities) of the acquisition target. 👑 Culture & Strategy are King: These are important topics to explore when considering M&A. While the black and white figures in a P&L are not the full story, the financial statements can be indicators for cultural and strategic differences to explore. For the right acquirer, these areas can be "low hanging fruit," areas ripe for improvement. For a business where owners will now be partners, it could be a source of ongoing tension or worse -- instead of 1+1=3, the businesses are worse off together than when they were apart. This business owner was super sharp, and had a sense of some of the concerns I raised. However, this is the value of having an advisor in your corner. In a few minutes, I was able to outline a handful of areas to discuss deeper or consider fully as they considered this potential transaction. #mergersandacquisitions #finance #entrepreneur #investmentbanking

Did you know that 68% of M&A deals destroy shareholder value? Picture this: Late one night, I'm reviewing a major tech acquisition. Traditional DCF shows $533M. Seems bulletproof. But something doesn't feel right. I run it through our machine learning model, trained on 1,400 historical deals. The algorithm flashes red: $460M maximum value. $73 million difference. That's not a rounding error - that's shareholder wealth at stake. Here's the fascinating part: The ML model wasn't just spitting out numbers. It had detected subtle patterns from hundreds of similar deals that humans often miss: - Market cycle timing - Industry-specific multiples - Hidden correlation factors - Post-merger integration success rates This revelation transformed how I approach valuations. Instead of treating DCF as gospel, I now use ML as a sophisticated "reality check" - like having 1,400 experienced dealmakers looking over your shoulder. The key insight? ML doesn't replace financial expertise - it amplifies it. It catches blind spots before they become costly mistakes. It pressure-tests assumptions against real-world outcomes. Most importantly, it forces us to ask the hard questions: 1. What market signals are we missing? 2. Are our growth assumptions supported by historical patterns? 3. Which valuation methods have proven most reliable for similar deals? I've seen several institutions' deal success rates improve by ~20% using this dual approach on particularly complex deals. Here's my challenge to you: On your next valuation, what if you supplemented traditional methods with ML validation? What hidden insights might you uncover?

Complex M&A transactions—like white space acquisitions, carve-outs, and cross-border deals—are more challenging to execute but offer significantly higher returns. Our analysis of $1 billion+ acquisitions found that these deals deliver 40.2% higher shareholder returns over three years than simpler bolt-on transactions. So, what drives success in these high-stakes deals? It’s all about strategy and execution: - 𝗔𝗹𝗶𝗴𝗻 𝗠&𝗔 𝘃𝗶𝘀𝗶𝗼𝗻 𝘄𝗶𝘁𝗵 𝗰𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆: Organizations that define and communicate their long-term value story are better positioned to achieve transformative outcomes.  - 𝗘𝗻𝗴𝗮𝗴𝗲 𝗳𝘂𝗻𝗰𝘁𝗶𝗼𝗻𝗮𝗹 𝗹𝗲𝗮𝗱𝗲𝗿𝘀 𝗲𝗮𝗿𝗹𝘆: Involving leaders in due diligence ensures alignment on key value drivers from the outset.  - 𝗦𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻 𝗶𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗶𝗼𝗻 𝗰𝗮𝗽𝗮𝗯𝗶𝗹𝗶𝘁𝗶𝗲𝘀: Building a culture of adaptability and refining M&A processes is essential for navigating complexity and driving synergy realization.    Complex M&A is a marathon requiring careful preparation, relentless focus, and iterative learning. Companies that embrace this mindset can turn challenges into outsized opportunities for growth. Explore more from this new KPMG US paper: https://lnkd.in/gSSRdK3g. Thanks to the authors for their #insights: Andrew Getz, Scott Rankin, Steve Sapletal, Rebecca Brokmeier, Todd Dubner, and Joanne Heng. #MergersAndAcquisitions #ComplexM&A #StrategyExecution #KPMGDealAdvisory

Every M&A is unique, and is dependent on the context and circumstances of the deal. Nevertheless, certain factors consistently make or break deals and mergers. Here are three takeaways from my experience: 1. Strategic Alignment & Execution: Clarity on "why" you’re doing the deal is everything. It should guide decisions at every stage. In one transaction, misalignment between us and the sellers led to a tough integration process—and the departure of key team members. That lesson stuck. In the next deal, we made the “why” central to every discussion, aligning everyone around a shared goal. The result was a smoother process, strong team retention, and long-term success. 2. De-risking deal roadblocks: Every deal comes with risks—but they aren’t one-size-fits-all. Evaluating risks in the specific context of the buyer, seller, and market is critical. Use data to dig deep into culture, product, financials, and go-to-market risks, and create actionable plans to mitigate them early. 3. Process & Integration: Closing the deal is just the start. A clear integration plan that ties back to the why we did this deal with well defined milestones can expedite ROI. At the same time, flexibility is key. Start with a well defined plan but stay agile and ready to change as the integration progresses.