Typically, the prime motivation for an acquisition is to accelerate growth but sometimes the whole is less than the sum of the parts. So how can buyers be sure the purchase will have the desired positive impact?
“Unfortunately, in some cases M&A transactions fail to deliver the expected value for the buyer in the long run,” says Ken McAndrew of Camigo Consulting, an M&A advisory firm.
“This is sometimes down to cultural or strategic misalignment between the buyer and the seller, causing friction post transaction and eroding value in the business. In other cases this is down to a lack of understanding of the complexity of the business being acquired and, as a consequence, underestimating the effort to realise the cost and revenue synergies.”
It’s why mature buyers take the time to look beyond the numbers and make sure they are aligned with the incoming leadership team, both culturally and strategically, before they make the decision to acquire.
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“They will also understand that creating long-term value post transaction takes time and requires collaboration with the senior stakeholders in the business. Trying to force home cost or revenue synergies that were identified in a report or spreadsheet, when the business isn’t ready to accept the change, rarely delivers a good outcome for all involved,” says McAndrew.
James McMenamin, corporate finance partner at PwC Ireland, says most buyers are “trying to turbocharge growth with speed and certainty.
“That usually means getting into new markets, adding capabilities they do not have today or consolidating to build scale where industries are fragmented,” he explains.
“The smartest buyers keep coming back to the same basics – durable earnings, clear value creation levers and cultural fit, so the value moves from the slide deck into the P&L [profit and loss account].”
When assessing the merits of any potential deal, start with the strategic fit.
“Does the target clearly advance the growth thesis and can value be realised within a reasonable time frame?” asks Tom Noonan, corporate finance director at PwC Ireland.
Understand the fundamentals of a target, including the quality of revenues, margin resilience and the credibility of its growth story.
“Additionally, it’s critical to map out the integration requirements early, covering systems, processes, technology, people and culture, and stress test whether the combined business can unlock synergies without disrupting the base,” says Noonan.
Before committing to a deal, buyers should confirm that regulatory, tax and legal considerations align with strategy and timetable.
“I encourage clients to invest properly in diligence with the right specialists, and to plan ahead for Irish FDI screening and merger control where they apply. At the same time, align tax and legal structuring early and keep a firm hand on valuation discipline. Finally, lock in funding certainty and agree clear decision gates, so the energy of the deal never gets ahead of the evidence.”
When it comes to due diligence, “do not stop at the financials”, he adds.
“I encourage teams to probe cybersecurity resilience, ESG practices and any geopolitical or supply chain exposures because these are now central to buyer decisions,” says Noonan.
“If the seller has strong vendor-style materials, use them, but still verify independently and triangulate across multiple data sources. Spend time with the target’s management and identify potential integration leaders early. Understanding the talent, the culture and how decisions really get made is often the difference between a deal that looks good on paper and one that delivers in practice.”
Have the right people in place to deliver the integration. “Leadership teams are expected to design and deliver a new organisation while continuing to run the existing one, effectively ‘building the plane while flying it’,” says Ian Whitefoot, partner at Deloitte Advisory. “Deals tend to perform better when integration is assessed and planned for during due diligence, with early decisions on what should change, what should stay the same, and a clear plan in place to execute once the deal completes.”
Once the deal is done, post-acquisition success hinges on more than just operational alignment – it’s about creating a cohesive integration culture.
“Start by crafting a clear integration strategy that aligns business operations, sets timelines and assigns roles. This is your roadmap to achieving the desired positive impact and synergies,” explains Stephen Walsh, advisory partner at PwC Ireland.
Successful integration lies in blending cultures. “When two organisations merge, differences in values and practices can cause friction. That’s why fostering a shared identity is crucial. By encouraging open communication and inclusivity, you create a space where employees feel heard and valued.
“When employees are engaged and aligned, the acquisition is more likely to deliver long-term financial benefits. Embrace integration culture, and watch your acquisition thrive.”
