[Michael Maggiotto Jr]

With all of the successes that M&A has generated for companies over the years, what is almost more amazing is the number of failures post-close. To quote an article from 2017 that is just as valid today as then, “As shown in a 2014 study by management consulting firm Bain & Co. that analyzed 150 mergers announced between January 2000 and July 2013, the top five root causes of deal disappointments or difficulties are:

● Due diligence failed to highlight critical issues.
● Overestimating synergies from combining the companies.
● Failure to recognize insufficient strategic fit.
● Failure to assess cultural fit during due diligence.
● Problems integrating management teams and retaining key talent.”
(Petrey, Stacey; 4/18/2017; https://www.chieflearningofficer.com/2017/04/18/human-capital-factors-ma-equation/)

Each of these has a strong connection to Human Capital as the root cause. I would like to hear the challenges you all have been facing with Human Capital Due Diligence efforts and the impact on the success, or failure, of the transaction within the 1-3 year window post-close.

What has worked and not worked?
What do you feel are the top 3 – 5 most critical components of the Human Capital Due Diligence efforts that are most likely to fall apart, be inaccurate, or ultimately have the most negative impact on success?
What have you all done to overcome these challenges in your transactions?

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