How do you measure and report the value creation and synergies of an M&A deal?

1 Buy-side consulting

Buy-side consulting refers to the advisory services provided to the acquirer or buyer in an M&A deal. Buy-side consultants help the buyer identify and evaluate potential targets, conduct due diligence, negotiate the deal terms, and integrate the acquired business. Buy-side consultants also help the buyer assess the strategic fit, financial impact, and operational synergies of the deal, and develop a post-merger integration plan. Buy-side consulting is often more challenging and time-consuming than sell-side consulting, as it involves more uncertainty, complexity, and coordination.

2 Sell-side consulting

Sell-side consulting refers to the advisory services provided to the seller or target in an M&A deal. Sell-side consultants help the seller prepare for the sale, market the business, attract and screen potential buyers, and negotiate the deal terms. Sell-side consultants also help the seller present the business in the best possible light, highlight the value proposition and competitive advantages, and address any issues or concerns raised by the buyers. Sell-side consulting is often more focused and streamlined than buy-side consulting, as it involves more clarity, certainty, and control.

4 Measurement and reporting

Measurement and reporting are the key activities to track and communicate the value creation and synergies of an M&A deal. Measurement involves defining and quantifying the sources and drivers of value creation and synergies, such as revenue enhancement, cost optimization, or capital efficiency. Reporting involves presenting and explaining the value creation and synergies to the relevant stakeholders, such as the board, the management, the investors, or the regulators. Measurement and reporting require clear and consistent methodologies, assumptions, and metrics, as well as regular and transparent updates and feedback.

5 Challenges and best practices

Challenges and best practices are the common issues and solutions that affect the measurement and reporting of value creation and synergies of an M&A deal. Some of the challenges include data availability and quality , integration complexity and delays, cultural and organizational differences, and stakeholder expectations and perceptions. Some of the best practices include setting realistic and achievable targets, establishing a dedicated and cross-functional team, using a robust and flexible framework, and engaging and communicating with the stakeholders.

6 Benefits and opportunities

Benefits and opportunities are the positive impacts and potential improvements that result from the measurement and reporting of value creation and synergies of an M&A deal. Some of the benefits include enhancing the credibility and confidence of the deal, validating the strategic rationale and objectives of the deal, and demonstrating the value added and return on investment of the deal. Some of the opportunities include identifying and capturing additional synergies, optimizing and refining the integration process, and learning and applying the best practices and lessons learned from the deal.