Synergies

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  • #115909

    Kai Jie
    Participant

    Should a particular group of synergies be prioritized in evaluation over another, or are they all equally important?

    #115980

    Beckie Callahan
    Participant

    I need more context about the deal rationale as I expect some patterns and trends may be identified. I would bet on a prioritization of synergies over treating them as equally important. What are the needs of the acquiring company and why does the management believe the transaction will be valuable? The leadership or steering committee should be able to set priorities and key expectations.

    I’m guessing that a group of synergies would include broad categories, such as revenue generating or cost cutting synergies? Or are your groupings more narrowly defined – like HR -acquiring talent for R&D? Some synergies might be industry specific, like a case of industry consolidation. Considering that each transaction is unique, then synergies are likely to be varied as well. Some might be business critical whereas others are only ‘nice to have.’

    #116001

    Poon Henry
    Participant

    Each deal has its own objective and thus the synergy effect will be different. It depends.

    #116209


    Participant

    I agree with the last post it all depend. What is critical, though, is that management has an understanding of the synergies or the why. It should be crystal clear why the acquisition is done. To say: Oh, we will have synergies…blah blah blah – will not work. We will synergies because we only need one of the two sales teams, etc.

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