Investors link high expectations with the purchase of a company or business segment: They are looking for the deal to increase the size of their company, create synergy and achieve higher sales. The situation in reality, however, is often a lot different – with companies underestimating just how complex a transaction can be. This can frequently lead to delays and losses in value. This is precisely why PwC places the focus specifically on value enhancement: With their holistic approach “Delivering Deal Value” (DDV), PwC’s experts sound out how value enhancement can be achieved right from the start of a deal – from due diligence to later integration. As a result, investors can be sure that the forecasted added-value will also be reflected in operating results.
PwC’s experts support investors in the following areas:
- Operational Due Diligence: Along with the financial and strategic aspects of a transaction, investors place a great deal of value on the complete transparency of the business process and the corresponding costs involved. The Operational Due Diligence analyses a company’s value-adding and supporting processes for risks and value-enhancement potential. In addition, the underlying assumptions in business planning, e.g. price rises of materials and personnel as well as margin improvement programs, are subjected to critical examination and evaluation.
- Operative Improvement /Delivering Value: What can companies do to remain competitive in a dynamic market environment? In this question, PwC assists companies with its “Value-Driver Analysis” and develops solutions for value enhancement such as improvement in product portfolio, strategic purchasing management, cost optimization and developing new locations.
- Carve-out Management: Carving out a business division is a complex undertaking – processes and systems are often very closely linked within a company. For this reason, companies have to be very precise in defining which company shares are to be sold and how to ensure a smooth transition after completion of the contract. Likewise, companies should use this type of spin-off as an opportunity to increase efficiency in the parent company as well as the subsidiary being spun off. In this way, companies can retain and enhance values.
- M&A Integration: The integration of the purchased company is the key to a successful transaction. In this phase, the object is to harmonize processes and systems, integrate new employees and kick-start optimization right from the outset. At the same time, business processes may not be impaired. The best way to achieve this is if the integration is planned professionally at an early stage, even during due diligence.
- Synergy Management: An effective synergy management starts well before the actual due diligence. Our experts take a realistic view to identifying and evaluating synergy potential so that this can actually be achieved after the acquisition. Practical experience has shown that purchasers often overestimate the synergy effects and consequently pay a purchase price that is too high. In the following phase, PwC experts accompany implementation of the synergy projects as well as measurement of the financial effects.
Until now, companies have aimed primarily at achieving size growth as a result of such transactions. In doing so, they have left a significant amount of potential untapped: Companies achieve growth in profits above all if they focus their attention on the operative business processes as well in every phase of the transaction.
And this is where the PwC Team can help you. It is made up of experienced international transaction experts, technical consultants and industrial specialists. The PwC Team has years of experience from more than 1,000 transactions and 5,000 advisory projects worldwide.