report from Deloitte Research on M&A trends contains some interesting findings. Although it is based on a wide survey of active acquirers earlier this year, when deal value and volumes were still high, the report positions itself as offering advice for
M&A strategy in today's uncertain economic climate.
The survey looked at what percent of the respondents’ M&A deals achieve their stated objectives within the expected time period. Only 49% of the corporate acquirers said over half their deals hit the mark on a timely basis. Deloitte looked at the different
ends of the scale - high achievers who get over 75% of deals right, and low achievers, who get less than 25%.
Despite their low success rate, nearly half the low achievers anticipated doing more deals during the next 18 months than they’d done during the prior 18 months.
"It’s clear low achievers were not terribly chastened by their poor luck with prior deals. This brings to mind Dr. Samuel Johnson’s observation about second marriages: a triumph of hope over experience," says the report.
Bu the survey also found that low achievers were more likely to base decisions on current prevailing business conditions. So given the uncertain impact of the credit crunch on financial institution balance sheets and the knock-on economic impact, low achievers'
optimism has probably waned, and this could stop them from finding and executing on good acquisition opportunities.