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    Mergers & Acquisitions Pay-off Optimization: The Commercial Due Diligence Imperative
    Mergers & Acquisitions Pay-off Optimization: The Commercial Due Diligence Imperative
    Mergers & Acquisitions Pay-off Optimization: The Commercial Due Diligence Imperative
    Ebook255 pages1 hour

    Mergers & Acquisitions Pay-off Optimization: The Commercial Due Diligence Imperative

    By Christophe Robinet

    3.5/5

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    About this ebook

    A short pragmatic book about commercial due diligence, i.e. marketing in deal preparation.
    ---
    "A MUST READ FOR ALL EXPERTS INVOLVED IN PRIVATE EQUITY AND M&As"(*)
    ---
    The book unveils a unique tool: MOSAICS to easily structure market data and articulate analytical tools. It provides a relevant synthesis of marketing fundamentals. The latter and the MOSAICS tool make this work of interest for M&A experts and beyond, for any Marketer. The book features a meaningful analysis of the practice while showing how commercial due diligence can enhance M&A pay-off.
    ---
    "A WAKE-UP CALL FOR THE BUSINESS WORLD"(*)
    ---
    One may challenge the interest for real life of an academic research. Well, the answer comes from the business world itself: the original manuscript was awarded the yearly Prize by ARFA (the French Association of M&A professionals) and received support from seasoned practitioners (*).
    ---
    (*) Refer to the quotes on the fourth cover and the foreword.
    ---
    TARGETED AUDIENCE:
    Financial executives, corporate strategy executives, management consulting and education (business schools'professors & students)
    ---
    KEY WORDS:
    M&A, mergers and acquisitions, pay-off, ROI, investment, value creation, deal value, deal preparation, dataroom, data room, commercial due diligence, commercial analysis, strategy, analytical tools, matrix, Ansoff matrix, BCG matrix, GE matrix, KSF, key success factor, Ohmae 3C, Porter five forces, 8Ps Krippendorf, SWOT, strategic marketing, market analysis, market intelligence, knowledge management, risk analysis, methodology, mosaics model, management consulting, strategy consulting, private equity, PE, investor, venture capitalist, corporate venture, corporate fund, investment bank.
    ---
    SOME AUTHORS IN BIBLIOGRAPHY:
    R.Bruner, A.Chernev, P.Howson, R.S.Kaplan, K.L.Keller, P.Kotler, M.McDonald, P.Millier, A.Reed Lajoux.
    ---
    EBOOK OR PAPERBACK:
    The e-book features all figures and graphs in color whereas they appear in grey levels in the paper version.
    LanguageEnglish
    PublisherBooks on Demand
    Release dateNov 20, 2014
    ISBN9782322029228
    Mergers & Acquisitions Pay-off Optimization: The Commercial Due Diligence Imperative
    Author

    Christophe Robinet

    Christophe Robinet, MBA, MSc - Consultant ----- The author has over 17-year experience in product management, innovation management and strategic planning in international B2B markets. He has been involved in strategic analysis, market risks analysis and business modeling. He successfully led market diversification and has been instrumental in elaborating M&A scenarii. Christophe Robinet operates as a consultant for investment funds, corporations' top management and entrepreneurs. Passionate about marketing, he designs modules for courses to be held in business schools or professional conferences. ----- M&A practitioners who accessed Christophe Robinet's original thesis recommended to share it to a wide audience(*). Their encouraging feedback plus the ARFA 's award motivated him to re-work the manuscript to issue the present book. ----- (*) refer to the quotes on the fourth cover and the foreword.

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      Book preview

      Mergers & Acquisitions Pay-off Optimization - Christophe Robinet

      To my wonderful wife, Dorcas, and our children, Lou-Ann and Yaël.

      TABLE OF CONTENTS

      FOREWORD

      HOW TO GET THE BEST OUT OF THIS BOOK

      AKNOWLEDGEMENTS

      TABLE OF CONTENTS

      LIST OF FIGURES AND TABLES

      1. INTRODUCTION

      1.1 Background

      1.2 Main research questions

      2. KEY CONCEPTS TO FRAME THE RESEARCH

      2.1 What mergers & acquisitions refer to

      2.1.1 mergers & acquisitions general definition

      2.1.2 M&A, an industry by itself

      2.1.3 M&A, one of many means of business strategy

      2.2 Motivations and types of acquisitions

      2.2.1 drive for acquisitions and players involved

      2.2.2 motivation for strategic acquisition

      2.2.3 typology of acquisitions

      2.3 The process of acquisition

      2.4 What does due diligence refer to

      2.4.1 definition

      2.4.2 legal frame

      2.4.3 a key step of the M&A process

      2.5 Scope and skills for due diligence

      2.5.1 from minimal approach…

      2.5.2 … to extensive approach

      2.5.3 team and skills set involved

      2.6 Summing-up the research field

      3 RESEARCH METHODOLOGY

      3.1 Literature phase

      3.1.1 disciplines involved

      3.1.2 sources

      3.2 Field phase one: interviews

      3.2.1 targeting knowledgeable persons

      3.2.2 personalized approach

      3.2.3 limited results

      3.3 Field phase two: on-line questionnaire

      3.3.1 design of an on-line questionnaire

      3.3.2 re-targeting knowledgeable persons

      3.3.3 using slightly modified messages

      3.3.4 exploitable results

      3.4 Synthesis and discussion

      3.5 Limitations and bias

      3.5.1 in relation to the scope

      3.5.2 in relation to the method

      4 COMMERCIAL DUE DILIGENCE IN LITERATURE

      4.1 Key principles for due diligence

      4.1.1 consistency with corporate strategy

      4.1.2 search what you don’t know, validate what you know

      4.1.3 due diligence is more than ever critical

      4.2 Definition, perimeter and outcome of commercial due dil.

      4.2.1 legal authors… a risk perspective

      4.2.2 finance authors… quantitative financial analysis as panacea

      4.2.3 key definition: what drives the target’s future

      4.2.4 perimeter of commercial due diligence

      4.2.5 note on assessment of the management team

      4.2.6 CDD concretely assesses risks & opportunities

      4.2.7 CDD provides critical input for the price negotiation

      4.3 Prerequisites: back to marketing fundamentals

      4.3.1 what marketing should be

      4.3.2 distinction between market and industry

      4.3.3 how life cycles impact strategy

      4.3.4 value creation is about satisfying client needs

      4.3.5 the art of segmentation

      4.4 Applicable analytical tools in CDD

      4.4.1 the challenge of an abundant literature

      4.4.2 MOSAICS model as an overview

      4.4.3 ensuring the correct use of tools

      4.4.4 tools related to (MO) market overview

      4.4.5 tools related to (S1) segmentation and (A) added alue

      4.4.6 tools related to (I) insiders

      4.4.7 tools related to (C) competitive positioning

      4.4.8 tools related to (S2) strategic positioning

      4.4.9 wrap-up

      5. FIELD OBSERVATION

      5.1 Reminder on methodology

      5.1.1 a two step approach

      5.1.2 exploitable sample

      5.1.3 limitations and bias

      5.2 Categories of respondents

      5.2.1 key discriminant: degree of involvement in due diligence

      5.2.2 consultants

      5.2.3 corporations

      5.2.4 corporate ventures

      5.2.5 other categories with financial drive

      5.2.6 other participants

      5.3 Tools implemented

      5.3.1 as for market overview

      5.3.2 as for market segmentation

      5.3.3 as for analysis of value proposition

      5.3.4 as for competitive positioning

      5.3.5 as for strategic positioning

      5.4 Information sources and role of intuition

      5.4.1 information sources

      5.4.2 intuition and rationality

      6. OPEN DISCUSSION ON THE PRACTICE IN COMMERCIAL DUE DILIGENCE

      6.1 An obvious heterogeneity

      6.1.1 use and mastering of analytical tools

      6.1.2 internal resources / skills available for CDD

      6.1.3 allocated time

      6.2 Elements leading to heterogeous practice

      6.2.1 acquisition drive

      6.2.2 management of the acquisition sequence

      6.2.3 distance to current business (or to current biz model)

      6.2.4 degree of maturity

      6.2.5 nature of offer

      6.2.6 other elements

      6.2.7 apparent necessity for CDD in the official due diligence time-window

      6.3 Consultancy firms as key players

      6.3.1 market mapping (their clients)

      6.3.2 industry mapping (their peers)

      6.3.3 terminology used

      6.3.4 behavioral variations

      6.3.5 secrecy management and involvement in advisory service

      7. CONCLUSION

      7.1 Answering the research questions

      7.1.1 what does commercial due diligence consist of?

      7.1.2 what methodological tools does literature provide to candidate buyers regarding commercial due diligence?

      7.1.3 what varies in the practice of commercial due diligence professionals?

      7.2 To go further

      7.2.1 from an academic standpoint

      7.2.2 from a business point of view

      7.3 Take home value

      8. EXECUTIVE SUMMARY

      R. REFERENCES

      I Books

      II Scientific articles

      III Reports and non-registered publications

      A. ANNEXES

      A to I Examples of analytical tools

      J to M Elements of investigation phase

      N About the author

      FOREWORD

      By Professor Drs.R.Sybren Tijmstra

      Professor in International Strategy and Management IAE Aix

      Graduate School of Management - Aix-Marseille University (FR),

      Managing Director TIMS Holding B.V. (NL)

      Complement by Mr.Peter Howson

      Director of AMR International Ltd (UK),

      Distinguished Author of the book[⁶] "Commercial Due Diligence -

      The Key to Understanding Value in an Acquisition"

      In this short book, M&As Pay-off Optimization - The Commercial Due Diligence Imperative, Christophe Robinet provides the business world with a wake-up call as well as with an excellent practical tool to act on it.

      What is the wake-up call I refer to? We all know that the success rate of strategic acquisitions, in the sense of creating shareholder value, is rather mixed, not to say negative. Companies try to increase the chance of success by putting a lot of effort into financial and legal due diligence.

      We also often hear the argument that for acquisitions, specifically of service companies, human resources and corporate culture due diligence might be a useful add on.

      However, commercial due diligence is often only used in a very limited way in the process and/or addressed with poor relevance. It is perceived as optional whereas its aim of understanding the value creation mechanism contributes to assess future cash flows and risks attached to the acquisition.

      By signalling this in a very convincing way and showing a possible solution, Christophe Robinet has certainly made his contribution to the acquisition practice.

      His MOSAICS tool box, in which he combined in a very creative way a lot of existing analytical tools, is excellent. As commercial due diligence is at the crossroad of many disciplines, this task was quite complex, but in my opinion he handled it in a remarkable manner. The excellent way in which he identifies which tools should be used at which stage of the process (environmentclient needs-competitors offer-position in the market and strategic position) makes it very practical and useful.

      MOSAICS is applicable to the tools themselves as well as to the strategic information it provides, and can be easily implemented.

      This book also draws a meaningful analysis of commercial due diligence practice in corporations, and in investment funds and also highlights the key role of consultants. This puts into perspective the MOSAICS tool box in terms of structuring market and strategic information.

      As my own professional life combines international professorships in strategy with the directorship of a strategy consulting firm and own entrepreneurial endeavors, I often witness the struggle of executive MBA students trying to combine in their thesis sound academic work with practical business relevance.

      Most theses I have been mentoring as a professor at the IAE-Aix-en-Provence Graduate School of Management (France) in the context of the MBA program Change and Innovation have achieved this objective successfully but this thesis stands out.

      Although the time was limited and the topic complex, Christophe ROBINET managed to conciliate both objectives remarkably: academic work serving the business world. The mentoring of this thesis

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