Thought Leadership Study: Trends, Challenges & Technology Use in a Changing M&A Environment

Forrester Consulting completed a thought leadership study called “Trends, Challenges, and Technology Use in a Changing M&A Environment”. Forrester took a look at over 200 M&A professionals to try and understand how strategies were shifting and what the top priorities were for these folks facing a rapidly changing market.


29 June 2010

Forrester completed a thought leadership study called “Trends, Challenges, and Technology Use in a Changing M&A Environment”. Forrester took a look at over 200 M&A professionals to try and understand how strategies were shifting and what the top priorities were for these folks facing a rapidly changing market.

While most survey participants were familiar and comfortable with leveraging technology, specifically virtual data rooms, for key parts of the process — the bottom line is that the perception and approach to M&A has changed fundamentally. The mentality of “growth in perpetuity” is gone, and deals are being viewed with increasing scrutiny. While deals seem to be back on the rise, companies are seeking to buy only what’s necessary and only at the right price. In other words, no one’s going to tolerate a mediocre acquisition — they have to be strategic and have clear immediate value for the company.

I think we’re all familiar with what a bad acquisition looks like. The stock of the company drops 15%, the CEO resigns, the company is sold off a year later for less than the price paid. The need to avoid these kinds of situations is vital for both the decision makers at these companies, and the companies themselves.

Nothing is more vital to the process of evaluation than having the right information. In fact performing financial valuation and gathering company and asset information were listed as top challenges within the M&A process by those surveyed. Again, while the virtual data room or VDR is well established as a sellside tool in most regions and industries, there is a growing need to ensure full transparency and knowledge transfer throughout the selling and buying processes. This is one of the key components to staying on track with a strategic acquisition and/or divestiture plan and vision.

These fundamental changes to the approach should mean fundamental changes to the way business is done. Those in the field of M&A are beginning to develop formulated strategies around their approach to the companies they buy and sell. The more effort put behind institutionalizing the function off M&A, the more those efforts can be fully aligned with those of the company as a whole. Naturally all of this begs the question of what the right technology is to facilitate the proper exchange of information and collaboration through the deal process. What kind of technology provider will you partner with as you move into the new world of M&A?

On July 22, Daniel Krauss, Forrester Analyst, will discuss “Trends, Challenges, and Technology Use in a Changing M&A Environment”, including a presentation of the results of the survey. He will be speaking about what these results mean for M&A professionals and the deal market. Don’t miss this opportunity to interact directly with this leading analyst. Click here to join us.