Intelligent M & A: Navigating the Mergers and Acquisitions Minefield, 2nd Edition

CHAPTER 11Post-Deal Review

Do firms learn from previous acquisitions? The easiest intelligence to collect and use is the information that already exists in-house. Such knowledge can come not only from a company's own prior deals, which are most likely to be relevant and applicable to the company's next deal, but second-hand by studying transactions of other firms, especially in the same industry, although useful information can also often come from further afield. Such organizational learning can potentially lead to an improvement in acquisition success rates. It is an area where the use of the intelligence function is critical in order to gain the competitive edge.

There is another reason why this improvement in acquisition success is important for a company. This is so that an acquisitive company can build up a reputation for being a successful acquirer. Companies for sale will seek out such buyers, knowing that they will be treated better post-deal. In the fairly common situation discussed in Chapter 3, where there are limited private auctions or bilateral discussions, there is a need for an acquirer to be invited. For example, in late 2013, according to The Wall Street Journal, MBK Partners, a South Korean private equity firm, sent out so-called “teaser letters” to only 40 potential bidders for a bottle-making company that it was planning to sell. If the business is of possible interest, you’d want to be on that invitation list.

M&A Skill as a Core Competency

For some companies ...