Tuesday, November 04, 2008

[IWS] Towers Perrin: EXPRESS M&A: HERE TO STAY? (FASTER PROCESS) [3 November 2008]

IWS Documented News Service
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations
-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor
---------------------- Stuart Basefsky
New York, NY 10016
-------------------------------Director, IWS News Bureau

Towers Perrin

Express M&A: Here to Stay? [3 November 2008]
Analysis by Towers Perrin Shows Changing Nature of M&A Process

London, 3 November, 2008 ­ While the volume of mergers and acquisitions may have declined, the phenomenon of "Express M&A" has arrived.  And it is not only companies in the financial services sector that are making opportunistic acquisitions in light of the global credit turmoil.  Express M&A is taking all sectors by storm, triggering a fundamental reappraisal of how deals are carried out.

According to analysis* of worldwide deals in 2007 and 2008 by global professional services firm Towers Perrin, transactions are being completed almost twice as quickly as they were a year ago.  The average duration from announcement to completion has plummeted from 142 days in 2007 to just 80 days in 2008.  This figure is likely to fall further as more deals are hastily wrapped up before the year end.

"Market turmoil has conjured up the concept of Express M&A, a high-speed deal process affecting all sectors where new ways need to be deployed to protect value," said Marco Boschetti, Towers Perrin's Head of Global M&A and Restructuring.  "But increased speed brings increased risk and makes prioritisation critical."

"We are seeing significant elements of due diligence effectively being postponed until after completion," Marco Boschett added.  "The concept of 'seize the day' is changing conventional M&A processes as the threat of future potential surprises pales next to the scale of savings or strategic value that might be achieved."

Towers Perrin is working with several leadership teams to help them manage the speed of change and choose the key actions from the deal timetable.  Critical elements of the deal process ­ from leadership retention to practical execution planning ­ are occurring at a much faster rate, while considerations such as rewards analysis and cultural integration are being postponed until aftercompletion.  The firm's advice to acquisitive companies is to build into the financials some margins for the unexpected.

AND MUCH MORE...including CHART....

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
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