Chris Hagedorn and Alex Liu discuss the role of M&A in launching large-scale transformations. They explore recent trends in M&A, the importance of communication during transactions, and the application of transformation principles in the industrial sector. They also emphasize the establishment of an empowered execution engine, the importance of building foundational capabilities and talent, and promote engagement with the podcast.
M&A transactions offer the opportunity for corporate-wide transformation, catalyzing change and value unlocking.
Effective execution of M&A deals, focusing on integration pace and value capture, is crucial in the current economic environment.
Deep dives
Transforming During a Transaction
Many companies miss the opportunity to transform during a transaction due to a focus on standalone operations. It is important to consider if transformation is right for the next M&A transaction, as it can catalyze corporate-wide change. Mergers offer the chance to pursue value unlocking, revenue growth, and change catalysts. Companies should set high aspirations, develop a bankable plan, establish an execution engine, and build foundational capabilities for sustainable transformation.
The Arc of M&A Activity
M&A activity experienced significant fluctuations due to COVID-19 and economic stability concerns. The current higher interest rate environment necessitates better execution of corporate M&A deals, focusing on integration pace and value capture. Deal rebound and stabilization are observed at new levels. It is crucial to consider the recent arc of activity when pursuing transformational M&A transactions.
The Opportunity of M&A for Transformation
M&A presents opportunities to unlock value, pursue revenue and growth initiatives, and serve as a catalyst for change. Not every deal requires transformation, but for those with significant opportunities, it can enhance the likelihood of success and value capture. Companies should evaluate if a transformation aligns with their M&A strategy and if there is a need for significant change to achieve upside value quickly.
Approaching Transformation in M&A
Approaching transformation during an M&A transaction involves developing a renewed vision for the combined enterprise, aligning the top team, creating a communication strategy, and focusing on strategy, value, execution, and people. Renewed vision, core alignment, and effective communication are crucial for executing transformational change. Tailoring the approach and focusing on both financial and operating aspects are key to success.
We discuss the role M&A can play in the launch and success of large-scale transformations. Our guests are Chris Hagedorn and Alex Liu. Chris is a leader in our Transformation Practice, where he designs and executes comprehensive transformations, including M&A integration and value capture to achieve rapid and sustainable performance improvement for clients.
Alex is a leader in our M&A Practice. He works closely with senior leadership teams on large-scale mergers and brings expertise in realizing revenue-based synergies.