"Operational due diligence guarantees return on integration" The true cost of a business acquisition is very difficult to predict. Not only the examination of the books, but also the assessment of operational risks is determining. Timothee Stockmans and Roland De Wolf, RESOLVUS partners, on the inestimable value of operational due diligence
Both visible and hidden elements play a role in the decision to take over a company. In order to estimate the added value a takeover will generate, two major pillars must be considered: the visible facts and the more hidden, sensitive issues. "To be fully prepared for the price negotiations, knowledge of both levels is essential. The deal rush, in which a potential buyer zooms in too eagerly on his target, often leads to hidden costs, such as the price of the integration, being insufficiently taken into consideration. With all the consequences that this entails. How do you valorize a company culture, an IT department, the logistics, the enthusiasm of the management and staff? That is exactly where RESOLVUS exposes the pain points and provides valuable solutions based on in-depth expertise.
The OD2 scan "70 to 80% of merger integrations fail. An integration and culture survey is therefore indispensable to predict what an acquisition exactly means for all stakeholders. At RESOLVUS we do this using our "OD2 scan": from our operational background - our professionals have all experienced it themselves - we assess all the operational risks, we identify possible synergies, we evaluate the maturity of the processes and systems, we evaluate the culture of employees and management, etc. In short: we are validating the 'integrability' of a company in a 'beyond finance' approach.
"We also examine the actual motivation for the acquisition, as well as the sometimes unexpected added value: what can the buyer learn from his target, for example? If this screening does not take place thoroughly, it damages the negotiations, resulting in incorrect pricing. The costs of a poorly prepared integration can be high, for example uncertain employees, wild rumors or a negative perception by the client. Note: this OD2 scan is not simply a form of risk management, we generate a meaningful return on integration. Anticipating all aspects of integration pays for itself in many ways.
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