Welcome to Insights on Mergers and Acquisitions

Mergers and Acquisitions Profile of Ramkumar

Mergers, acquisitions, and divestitures can be a vital parkway to success, but it requires more than just closing a deal. Successful businesses generate strategic programs for M&A from target identification, to acquiring, integrating, and expanding a business, to preparing for downturns and creating possible exit strategies.Whether you are considering a joint venture in an emerging market, complicated domestic or multinational activity, or divesting of non-core assets, the stakes are high, and you must be triumphant. As a competent, adept advisor/consultant for M&A, business valuation, and corporate revival/restructuring, this website, Insights on Mergers and Acquisitions, offers M&A advisory services,  assists businesses’ management strategies to enhance corporate value and its business valuation.

Key Insights on Mergers and Acquisitions in 2020

Disruptive M&A: Are you ready to determine your future

Presently we exist in a world of business model disruption catalyzed by technological advancement and the rise of digital-native contenders. The executive locus has substantially changed to funding in future growth engines. It is no wonder that dealmaking has likewise evolved.

The rise in Scope M&A transactions

Scope deals, which we describe as deals designed to penetrate faster-growing segments or to acquire new abilities for future growth, now constitute approximately 60% of all transactions worth more than $1 billion in business valuation. Scope transactions are estimated at least as successful as scale deals—and amongst scope deals, those directed at acquiring new skills get ranked as most successful. That stated, this conclusion comes with discretion and not supported by scientific research or other concrete proof points. We are beginning to understand that some of these transactions are successful, but we’re nevertheless in the initial days. In fact, in 2019, some scope deals got considerably more significant than conventional and started seeming like one-off big bets. This trend is dangerous; for the records of large, big-bet acquisitions have usually not been pleasant.

The importance of Programmatic M&A

Corporations that develop a repeatable skill for M&A through regular buyouts better all others. Notably, frequent acquirers don’t only acquire the most; they also divest the most. Scope transactions assist businesses to grow into new growth segments and combine new capabilities, and scale ventures serve to establish leadership positions, and divestitures free the time, talent, potential, and resources that are locked up in nonstrategic businesses. Skilled acquirers show us that performing scope deals, particularly for technological abilities, needs a distinct mindset and strategy than those used for scale transactions.

  • A conventional target-screening strategy within a limited industry limit is hardly sufficient in today’s context. The most competent acquirers are quickly growing more widespread market-sensing abilities to identify and pursue new technologies and new business models.
  • We understand that most deals falter at the start, at diligence, and this has not altered, even if the deal mix has. Many acquirers are enhancing the likelihood through earlier cross-functional team engagement, longer diligence horizons, and more healthy relationship-building to know the people, culture, and expertise. After all, that’s where the value usually is.
  • We are witnessing a genuine interest in acquiring new abilities, whether digital or otherwise, to extend the existent business or for innovation. Conventional scale integration playbooks won’t serve to seize the value in capability deals. In a notable divergence from traditional strategies, successful acquirers are driving with joint value-creation programs, not functional integration.
  • Lastly, there is no way to invest in new growth engines without divesting businesses that no longer suit the expected strategic plan, but there is also no basis for squandering value in the process. The most reputable companies divest without unnecessary delay, and they plan ahead of time to get their due share of profit.

In the current volatile environment, the most successful organizations will take benefit of any opportunity to establish their structural positioning in the business through preplanned M&A and divestiture activity.

About Insights on Mergers and Acquisitions

Insights on Mergers and Acquisitions provide an understanding of the M&A world and the latest updates. Insights on Mergers and Acquisitions also offer M&A advisory services to organizations confronting numerous challenges relating to M&A and offer guidance comprising all perspectives of M&A so that each business can succeed with the crucial concerns accompanying M&A.

Ramkumar manages the website – Insights on Mergers and Acquisitions. Ram is an advisor/consultant for M&A who enables companies to proliferate through M&A activity and strategic alliances. As a competent advisor/consultant for M&A, he has vast experience and demonstrated expertise in analyzing, structuring, and negotiating acquisitionsdivestituresjoint ventures, and other strategic partnerships. 

As an adviser/consultant for M&A transactions, Ram provides M&A advisory services and specializes in business casescontract negotiationfinancial valuationsintegration planning, and commercial due diligence.

Services Offered in Mergers and Acquisitions

Resolving transaction issues throughout the process
Business valuation of the target business
Preparation of a pitchbook or confidential information memorandum for a seller
Providing negotiation of purchase and sale agreement and other deal-related agreements
Identification of prospective buyers and discussions with these parties
Coming with an Integration strategy and then working as part of the Integration Management Office (IMO) to realize deal synergies

Looking for M&A advisor?

  • Increase your likelihood of success by sharpening your M&A strategy and goals, developing your M&A team and abilities, and establishing a repeatable process.
  • Take due diligence to the next level with a fact-based, rigorously quantified evaluation that supports you ward off a deal frenzy, spot synergies others fumble, and plan for integration long before the deal gets inked.
  • Capture the best value from M&A with a measured approach to integration that alleviates the many risks that can undermine a deal’s anticipated synergies

Blogs

Common Valuation Frameworks

When i perform valuations, i concentrate on two approaches: enterprise discounted cash flow (DCF) and discounted Economic Profit. DCF relies on cash flow in and out of the company, rather than on accounting-based earnings. The discounted economic-profit valuation model can be very relevant due to its close link to business theory and competitive strategy. Economic Profit highlights whether a business is earning more than its WACC and quantifies the value generated each year. This post will provide my insights on the most common valuation frameworks applied to value an enterprise.

Link Between The Right Growth Strategy and Value Creation

To maximize value for their stockholders, firms should know what drives growth and how it generates value. For large organizations, the growth of the markets in which they serve mainly drives long-term revenue growth. Although gains in market share add to revenues in the short term, these gains are far less critical for long-term growth.

Importance of ROIC in Business Valuations

The valuation of a business depends on growth and returns on invested capital. ROIC gets driven by competitive advantages that allow companies to accomplish price premiums, cost, capital efficiencies.

Understanding The Risks and Cost of Capital in Business Valuation

In valuation, the topics of risk and capital cost are crucial, integral, and laden with misunderstandings.These misunderstandings can lead to strategic blunders. For instance, when a firm borrows capital to fund an acquisition and employs only the cost of debt to the target’s cash flows, it might inevitably overvalue by two times the target’s value. Conversely, when a company attaches an arbitrary risk premium to a target’s cost of capital in an emerging market, it could undervalue the company by half. In this post, I provide insights on understanding the risks and cost of capital in business valuation

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