M&A Strategy Support

Unlock multiples of value

M&A strategy is vital to the success of many companies operating in today’s economy. Most CEOs realize that their companies cannot succeed on organic growth alone without making acquisitions. Acquiring is much faster than organic growth, and speed is unquestionably essential in today’s economy.

However, it is a known fact that half of M&As fail to deliver on their promise. As prevalent as they are, M&A activities use vast amounts of company resources and absorb considerable management time. Failed M&A deals not only compromise the strategy of the firm but ultimately drive substantial financial losses.

Things don’t have to be this way. External expertise can help management in many ways and act quickly given acquisitions usually require tight time frames. Strategic assessments, target screening, due diligence, synergy sizing, and valuation comprise our areas of expertise that can improve the odds of a successful deal.

Are you experiencing these issues?

Buying or selling a company requires precise information often approximated or left unchecked.

Lack of a sound portfolio strategy as a starting point.

M&A strategy not aligned to the company strategy.

Absence of a sound strategic rationale.

Scattershot investment thesis against imprecise targets.

Lack of viable targets.

Overpaying for an acquisition.

Any of these issues flag the lack of market intelligence necessary to guide a successful M&A initiative.

Our Approach

We help clients take a systematic approach to M&A, including searching, identifying, and pursuing targets that are an excellent fit to their business portfolios.

We set out to answer three critical questions:
(1) What is the strategic potential of the overall business?
(2) What is the potential to create additional value? And
(3) can new ownership achieve the target’s inherent value?

How We Help

We assist clients in their M&A strategy to complete the right transaction at the right value.

We provide a comprehensive set of services designed to meet the buyer’s objectives.

Icon for M&A Strategy Assessment

M&A Strategy Assessment

We help clients conduct a strategic assessment of the investing company. We perform an in-depth examination of its strategic position, rationale for the transaction, and value creation ... learn more

M&A Strategy Assessment

We conduct a strategic assessment of the investing company.

  1. Strategic Position. The first task is to understand its strategic position. Because M&A deals are performed to improve the competitive advantage of the business or the corporate advantage of the entity, we help clients analyze the following items:
    • Competitive or corporate advantage
    • Profit model and value drivers
    • Strategic control points
  2. Rationale of the Transaction. With a clear vision of the strategic situation in place, the next objective is to assess the strategic merit of the transaction:
    • Is a transaction necessary to fulfill the corporate or business strategy?
    • Why?
    • How does this deal satisfy the strategic objectives?
  3. Value Creation. With a clear understanding of the strategic rationale for the transaction, the objective of this task is to identify the amount of value creation:
    • How much value will the deal create?
    • Over what period?
    • What is the financial attractiveness of the deal?

This line of analysis sheds light on critical issues about the strategic position of the firm as a starting point and its potential for economic value creation. Ultimately, it sets the foundation for an accurate valuation of the business as a stand-alone, prior to the inclusion of any synergy with potential buyers.

© 2022 Great Prairie Group
Icon for Corporate Portfolio Analysis

Corporate Portfolio Analysis

We help clients examine their business portfolio across four principal dimensions, including market view, competitive view, financial view ... learn more

Corporate Portfolio Analysis

A company with multiple businesses must have a clear portfolio strategy and portfolio management to stay competitive.

We help clients examine their business portfolio across four principal dimensions:

  1. Market View: what is the market performance of the portfolio (relative market growth)?
  2. Competitive View: what is the competitive strength of the portfolio (profitability vs. relative market share?
  3. Financial View: what is the performance of the portfolio to create value (returns)?
  4. Cash Flow Balance: how well is the portfolio balancing cash flow (cash generation, cash use)?

The collective results of these tests allow optimizing the portfolio performance by comparing discrete opportunities to invest or divest business units and make effective resource allocations.

© 2022 Great Prairie Group
Icon for Target Screening

Target Screening

We help clients employ a systematic approach to identify and call upon far more prospects that they would be able to do on their own, that maintain confidentiality, and meet specific, predetermined criteria ... learn more

Target Screening

The question is: how do you identify targets? If you have determined that your firm must grow by acquisition, then you need to set guidelines to be met. Pro-active companies don’t rely on investment bankers to bring forth targets. Winning companies take charge with an approach that reflects their strategy.

We help clients employ a systematic approach to identify and call upon far more prospects that they would be able to do on their own, that maintain confidentiality, and meet specific, predetermined criteria.

  1. The critical starting point is a sound acquisition strategy and clear screening criteria, broad enough that viable options don’t get excluded from the onset.
  2. The screening criteria vary substantially across companies. They might include size, geographic footprint, scalability, EBITDA, leverage, market share, and earnings impact.
  3. Strategic fit usually comprises the primary corporate objective and a critical factor in M&A analysis.
  4. Increasingly important are the sustainability of the target’s business model, the competitive advantage, and the post-merger requirements to make the deal a success.
  5. After passing through the initial filters, we apply successive filters for a more refined match. Some of these may include product fit, synergy size, integration potential, and more.

Such an upfront target screening process saves time and resources later, before committing to subsequent deep-dive analyses to better assess the value and integration potential of viable targets.

© 2022 Great Prairie Group
Icon for Strategic Due Diligence

Strategic Due Diligence

We help our clients determine the strategic position of the target company. We analyze the strategic drivers of the future viability of the firm, including customer performance, cost position, competitive advantage, risk, as well as the drivers of earnings and and cash flow ... learn more

Strategic Due Diligence

© 2022 Great Prairie Group
Icon for Final Price Estimation

Final Price Estimation

We help clients determine an accurate price for the acquisition of the company. We take into account and quantify five items critical to price: (1) the value of the stand-alone target company, (2) the value of improvement opportunities, (3) the net value of synergies ... learn more

Final Price Estimation

We help clients estimate the price of the transaction. By definition, a deal will take place only if the buyer and the seller agree on a price. That price must be higher than what the target values itself. Therefore, this analysis is crucial to closing the deal.

We take into consideration the following items to estimate the final price:

  • Value of stand-alone target company
  • Value of improvement opportunities
  • Net value of synergies (value of synergies – cost to capture synergies)
  • Control premium
  • Total Value

The quantitative assessment of each of these items provides a solid foundation to negotiate a price. Plenty can go wrong at this juncture. Remember, we are talking about buyers and sellers on opposite sides of the deal finding an agreement in a coherent manner across several elements of value of the transaction. Therefore, managers need to be confident, fully informed, and prepared to negotiate from a position of strength.

© 2022 Great Prairie Group

We also provide an extensive service line designed to meet the seller’s objectives.

Icon for Exit Strategy Assessment

Exit Strategy Assessment

We conduct a strategic assessment of the selling company. We follow a disciplined approach, which includes a seven-point analysis: industry situation, market position, competitive position ... learn more

Exit Strategy Assessment

We conduct a strategic assessment of the selling company. The analysis includes the following steps:

  • Industry situation
  • Market position
  • Competitive position
  • Cost position
  • Defensibility
  • Decomposition of its Return on Net Assets
  • Financial attractiveness

This analysis serves to determine the strategic position of the firm, including its strengths, its value drivers, and its strategic control points. It also sets the foundation for an accurate valuation of the business as a stand-alone, prior to the inclusion of any synergy with potential buyers.

Icon for Hygiene Analysis

Hygiene Analysis

We examine the selling company to determine opportunities for strategic improvements. Considerations include revenue growth, cost reduction, improved asset efficiency ... learn more

Hygiene Analysis

We examine the selling company to determine opportunities for strategic improvements. Considerations include the following:

  • Revenue growth
  • Cost reduction
  • Improved asset efficiency
  • Cost of capital
  • Associated cost of improvement

Findings allow management to decide whether to field improvements before selling the company to increase its value.

Icon for Prospective Buyer Screening

Prospective Buyer Screening

We help clients employ a systematic approach to identify and call upon far more prospective buyers that they would be able to do on their own, an approach that maintains confidentiality, and lays out specific, predetermined screening criteria ... learn more

Prospective Buyer Screening

The question is: how do you identify qualified buyers? If you have determined that your firm must sell, then you need to set guidelines to be met and find those buyers. Pro-active companies take charge with an approach that reflects their strategy.

We help clients employ a systematic approach to identify and call upon far more prospective buyers that they would be able to do on their own, an approach that maintains confidentiality, and lays out specific, predetermined screening criteria.

  1. The critical starting point is a sound selling strategy and clear screening criteria, broad enough that viable buyers don’t get excluded from the onset.
  2. The screening criteria vary substantially across companies. They might include size, geographic footprint, scalability, EBITDA, leverage, market share, and earnings impact.
  3. Strategic fit usually comprises the primary corporate objective and a critical factor in M&A analysis.
  4. Particularly relevant are the buyer’s financial capabilities, expression of interest, buying skill, decisiveness, and readiness to make the deal a success.
  5. After passing through the initial filters, we apply successive filters for a more refined match. Some of these may include employee retention, integration potential, and more.

Such an upfront screening process saves time and resources later, before committing to subsequent deep-dive analyses, discussions, and negotiations.

Icon for Stand Alone Valuation

Stand Alone Valuation

We assist management in conducting a bottom-up valuation of the business, including credible revenue and profit projections, the required asset structure, capital investments, cash flow ... learn more

Stand Alone Valuation

With the situation of the business in focus and a deep understanding of its profit model, the next step is to value the target as a standalone.

We conduct a bottom-up valuation of the business based on the drivers of shareholder value, including the following items:

  • Revenue projections
  • Cost structure
  • Asset structure
  • Capital investments
  • Cash flow
  • Strategic risk
  • Discount rate

As part of this analysis, we perform two types of valuation:

  • Valuing the target based on its future performance, and
  • Valuing the full potential of the business, including value creation opportunities
Icon for Final Price Estimation

Final Price Estimation

We help clients determine an accurate price for the acquisition of the company. We take into account and quantify five items critical to price: (1) the value of the stand-alone target company, (2) the value of improvement opportunities, (3) the net value of synergies ... learn more

Final Price Estimation

We help clients estimate the price of the transaction. By definition, a deal will take place only if the buyer and the seller agree on a price. That price must be higher than what the target values itself. Therefore, this analysis is crucial to closing the deal.

We take into consideration the following items to estimate the final price:

  • Value of stand-alone target company
  • Value of improvement opportunities
  • Net value of synergies (value of synergies – cost to capture synergies)
  • Control premium
  • Total Value

The quantitative assessment of each of these items provides a solid foundation to negotiate a price. Plenty can go wrong at this juncture. Remember, we are talking about buyers and sellers on opposite sides of the deal finding an agreement in a coherent manner across several elements of value of the transaction. Therefore, managers need to be confident, fully informed, and prepared to negotiate from a position of strength.

The Results You Can Expect

  • Clarity of strategic position of the buyer or seller
  • Fact-based validation of the strategic rationale
  • Portfolio fit and performance
  • Pursuit of feasible targets
  • Objective analysis of target company’s strategic value
  • Assessment of strategic risk
  • Accurate business valuation