STRAT | M&A - STRAT PLANNING PARADIGM

With great sadness, this is the last STRAT podcast that Mark Mansfield recorded. On Christmas morning, he sadly passed away, and while his cause of death is currently unknown, his zest for life, always curious mind, great wit, and profound intellect lives on, and his legacy and presence in these numerous STRAT podcasts is something all of us cherish as we mourn his passing. In the world of Mergers and Acquisition (M&A), we see three legs to a successful stool in what we call “The STRAT Approach”: 1. Scenario Development / Testing (War Gaming) 2. Transaction Execution (Investment Banking) 3. Post Merger Integration (PMI) Trillions of dollars are spent yearly on M&A, however it is widely assessed that 70% fail. This stunning failure rate, with all it implies, needs to be unpacked, because with the right approach there can be predictable success. If there is no clear connection between M&A strategy and corporate strategy, it is almost always a recipe for disaster. There are the Three C’s of Successful M&A: Competitive advantage – ability to quickly assess/reassess how strategy will hold up / adapt to external drivers (WARGAMING) Capacity – FINANCIAL & ORGANIZATIONAL (Dry powder/accessible, capability to execute, is there change in process and can you handle more….. follow on acquisitions – programmatic strategy GAP ANALYSIS Conviction – consistency with team / management / Board of Directors (BoD) - there must be top level support / champion at top and what is being done must be well communicated and understood throughout organization and stakeholders (investors). Mark and Hal explore the vast intricacies of how to avoid M&A failure, and such topics as divesture considerations and even how ESG can be perceived as a drag in this process. Even though there is $2 Trillion in capital waiting to be deployed, M&A must be viewed holistically within the context of strategy and possible scenarios. That is the STRAT approach.