Merger & Acquisition Filter

Benefit

Assists in answering the question of whether the acquisition of a particular company is appropriate from the perspective of the market units.
Provides a solid approach to avoid target selection mistakes and minimize the risk of failure for strategic or cultural reasons.
Shows the current attractiveness of a candidate from a market perspective.
Provides an overview of a candidate's potential contribution to securing the buyer's future.
Relates the advantages and disadvantages of different candidates to each other and enables a structured comparison.

Applications

Strategic objectives do not necessarily have to be realized by the company itself or one of its business units. In some cases, the acquisition of another company is a good option for achieving objectives. However, both the acquisition itself and the post-merger integration are associated with high investments and require a lot of capital. In addition, the successful continuation of an acquired company is not guaranteed because the integration of strategies, structures, people and cultures of two different companies always represents a risk. It is therefore important to obtain a concrete picture of the actual attractiveness of a company and its potential contribution to the future success of the prospective buyer before acquiring it. The M&A filter can provide valuable support in this regard. With this tool, the strategic fit can be checked quite precisely before contacting and talking to the management of a target. This tool is about evaluation from a market perspective. Classic risk management in the sense of financial and tax due diligence is not the subject of this chapter and cannot be covered by the M&A filter. This chapter is accompanied by an online software tool which the reader can use to compare acquisition candidates with each other and assess their suitability for the buyer.