【正文】 ?Poor post acquisition integration –inadequate planning –failure to exploit revenue/margin potential –disrupted relations with customers, employers and suppliers –culture clash。t allow a transaction mentality to dominate the process ? Look for targets that present best fit in terms of: – relatedness – impact on market position ? Examine key success factors of potential targets ? Examine petitive position of client vs. petitive bidders ? Define business segments ? Diagnose key petencies and any skill gaps ? Analyze market dynamics ? Study cost of acquisition versus anic growth Bain MA 15 Principles Guiding Principles (2 of 2) Bain believes that a clear and disciplined approach to the acquisition process is vital to ensure success. Principles: Activities: Execution Capture Full Value ? Make better decisions upfront through careful due diligence ? Strive to identify deal breaker issues as early as possible ? Use information and insights to provide confidence in making a bid ? Clearly municate corporate vision to target ? Begin integration process as early as possible ? Be objective to ensure a fair decisionmaking process ? Create a set of shortterm and longterm objectives ? Quantify all potential synergies and cost savings ? Examine margin and revenue forecasts ? Evaluate management of target ? Provide a blueprint for capturing full potential value ? Support managerial integration team Bain MA 16 Principles Strategy and MA ?Corporate objectives –growth and financial targets –petitive arena ?Corporate strategy –strategic position –management of resources ?Business unit objectives –business definition –growth and financial targets ?Business unit strategy –strategic position –key success factors –sustainable petitive advantage Organic growth Growth through business unit acquisitions Growth through corporate acquisitions Acquisitions at both the corporate and business unit level need to be thought of as an integral part of a pany39。 Management Interviews) Bain MA 22 ( 0 .1 )0 . 00 . 1( 1 0 .0 % )( 5 .0 % )0 . 0 %5 . 0 %1 0 . 0 %Market Impact of Announced Transactions* Principles The stock market rewards panies that make related and/or focused acquisitions. Definition: Note: * Two weeks before pared to one week after announcement Source: Industry Literature Review, Bain Analysis Unrelated Related Focused ? Minimal cost overlap between acquirer and target ? Medium degree of cost overlap ? Target derives 70% of revenues from same business as acquirer ? Significant amount of activity and cost overlap between acquirer and target ? Target plements existing product line and adds to core petencies of acquirer Average Percent Price Increases Bain MA 23 Examples of Failures (1 of 2) Principles Industry Acquirer Target Transaction Value Acquisition Thesis Reason for Failure Entertainment Sony Matsushita Columbia MCA $ $ ? Own up stream contents for downstream hardware ?Inadequate due diligence –over valued synergies ?Strategically flawed and poor integration Finance Sears DeanWitter $ ? Build a onestop financial supermarket ?Inadequate due diligence –limited crosssell potential Consumer Goods Quaker Oats Snapple ?Inadequate due diligence –growth cycle not well understood –brand strength overestimated ? Leverage distribution channels $ Sources: Industry literature。 Bain Analysis. Retail Allied Federated Technology/ Telemunications ATT NCR $ ?Expand geographically ?Inadequate due diligence –overvalued potential synergies and brand value ?Technology/ telephony integration ?Strategically flawed –few synergies between puter hardware and telephony ?Poor integration $ ?New market entry Novell WordPerfect ?Poor integration –culture clash $ The MA landscape is littered with failures which failed to adhere to the core guiding principles. Bain MA 25 Principles Examples of Successful Acquisitions (1 of 2) Industry Acquirer Target Transaction Value Acquisition Thesis Reason for Success Wells Fargo Crocker $ ?Expand geographical reach and leverage backoffice ?Careful due diligence and integration – capture of synergies and cost savings Food Tyson Holly Farms $ ?Extend product line ?Good strategic fit and due diligence –capture of cost sharing potential Consumer Goods Cadbury Schweppes Dr. Pepper/ 7Up $ ?Expand geographic distribution ?Careful due diligence –increased scale and presence as a global player First Financial Management Financial Services First Data $ ?Obtain scale economies ?Wellmanaged integration –integration of credit card processing services of consumer and mercial sides Sources: Industry literature。 open munication of strategic vision Manufacturing Crown, Cork Seal Carnaud (French) $ ? Expand geographic reach and leverage product strengths ? Good strategic fit and due diligence – strong understanding of market dynamic to improve strategic position Transportation Union Pacific Chicago North Western Transportation Company $ ? Expand geographically ? Good strategic rationale – preemptive strategic move to maintain strategic position Sources: Industry literature。s approach to acquisitions follows a series of key steps. ? Should an acquisition strategy be pursued? ? Validate screening assumptions Bain MA 29 Bain Approach MA Value Chain Objective: ? Identify potential candidates which present best fit in terms of: – relatedness – impact on market position ? Understand full strategi