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Driving greater value from M&A

Often brought in by multinationals to troubleshoot after a merger or acquisition deal has failed to deliver, technology strategy company nu Angle is launching a new Technology Assessment Service to pre-empt the common issues. It has brought in former Reckitt Benckiser head of R&D to help organisations gain value earlier from acquisitions.

Technology Assessment Service

Although M&A deals are increasingly done for growth, only a third contribute any value*. Dr Steve Bone, co-founder of nu-Angle, says often his company is asked to fix the R&D situation after the merger once the finance and legal people have left the scene.

 

He says: “Generally a deal is made because it looks a good financial transaction on paper and it is often the chief technology officer (CTO) who is left to drive the value downstream.

 

“If the CTO inherits two product development departments with a different clock speed, then this can be a real headache when it comes to making the integration work.

 

“This is particularly evident if the R&D departments have completely different cultures, for example one consumer facing, the other science focused.  Or if there are major technology hurdles to overcome before a promised product is ready for market which has not previously been acknowledged.”

 

nu Angle has identified a number of common reasons why M&As,designed to acquire new product streams, underperform.

To help organisations address these issues at an earlier stage it has created an R&D and Technology Assessment Service and has brought on board Dr Richard Ellis, former senior vice president Global Research and Development at Reckitt Benckiser to support its delivery.

 

Dr Ellis brings a wealth of expertise gained from 11 years at Reckitt Benckiser and senior roles in global innovation at Unilever.

 

He says: “Acquisitions go ahead as it is thought one and one make more than two, but if you haven’t the pipeline of products to support that growth you can’t begin to meet the ambitions that have been raised for the merger.

 

“Additionally, it is important not neglect the cultural issues. Building a high performing team is vital to ensure success and people need to be constantly reminded of this.

 

“In my experience, unless you spend the time to build a technology strategy, to ensure the innovation pipelines are inline with the expected growth, there is a risk that the financial targets will not be met.”

 

Part of nu Angle’s service is to assist with the development of a technology strategy and find synergies between the two product portfolios. By taking the strengths of both companies it is possible to come up with new opportunities in both areas or in innovative approaches that will become new growth platforms.

 

nu Angle has developed a well-proven process for doing this based on experience of working with some of the world’s most innovative organisations.

 

Steve Bone says: “Time and again, organisations make the same mistakes and insufficient due diligence may result in knowledge assets being overvalued.  This can have a detrimental effect on the company in the longer term. In many cases forward planning would allow companies to gain value sooner and we are able to assist with this process.”

 

*KMPG report. ‘A new dawn: Good deals in challenging times’

The report discusses the results of the sixth global survey commissioned by KPMG to examine M&A deals throughout their life cycle—the way these deals were managed and the value they represented.

©2015 Holdsworth Associates