From strategy to implementation, there is significant opportunity to capture more value from M&A deals. Those were the overall findings from a recent Grant Thornton LLP survey of CEOs, managing directors, CFOs and other high-level executives. The 2018 Deal Value Curve Study found that only 14 percent of all deals exceed their initial expectations for income or rate of return.
The findings confirmed what Grant Thornton professionals have often found in M&A deals, in which trillions of shareholder dollars change hands every year: Thoroughly scrutinizing the details of transactions, well before the transaction begins and well beyond tax and earnings due diligence, helps highlight the precise drivers of value and leads to a much greater chance of success.
Among the findings were a lot of “onlys”:
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- Only 14 percent of survey respondents found that deals exceed their initial expectations for income or rate of return.
- Only 36.8 percent strongly agreed that efficient M&A execution (diligence, planning, integration, optimization) is a well-understood core competency of their company.
- Only 38.2 percent were very clear on precisely which acquisition targets they should pursue.
- Only 32.5 percent were very clear on what they should be paying.
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