During our constructive course, there are clearly certain due diligence required prior pursuing any M&A transactions. How do you measure the success in the M&A transactions? what sort of due diligence required in post M&A deals?
I’ve found that in the middle market, pre-purchase due diligence is very limited. Often times the due diligence is post-acquisition. It changes the integration timelines from what many “experts” say and it is essential. Middle market buyers usually have some big vision of the transaction outcome with very limited specificity on how they will measure it.
Post-M&A due diligence is critical to ensure that the merger achieves its intended goals and creates value for stakeholders. It’s important to remember that due diligence doesn’t end when the deal closes. It’s an ongoing process that can determine the long-term success of the merger or acquisition. Measuring the success of M&A transactions and conducting post-merger due diligence are both critical components of the M&A process. For example financial Performance, one of the most direct ways to measure success is through financial metrics such as revenue growth, profitability, and return on investment. Another example might be market share. Successful M&A could lead to an increased market share. If one of the goals was to dominate or significantly influence a market, measuring market share before and after the merger is crucial.
I agree with Karen. I’ve found a lot of variation in the level of due diligence that was allowed prior to contract execution. I haven’t seen a lot of focus on the metrics other than how close we come to the dollars outlined in the original business case.