The disruption caused by the COVID-19 pandemic has turned the mergers and acquisitions (M&A) market upside down and no one knows for sure what the next few quarters will bring. Market conditions seem to indicate that deal activity will be down for the remainder of 2020, but two things remain certain. First, the fundamental principles of a successful M&A transaction continue to be the same. Second, there is opportunity when considering a buy-side or sell-side transaction. Whether you are looking to gain entry into new markets, divest an underperforming business unit for survival, or enhance your organization from a digital perspective, enterprises must adjust their deal strategy to the new realities.
The New Deal Domain
Our strategists have created a five-point guidance for the C-suite contemplating M&A deals.
Organizations that are facing financial difficulty could consider a divestiture to refocus strategy, but speed to complete the deal will be critical.
It is a buyer’s market and companies with large cash positions will have an opportunity to acquire companies at a lower acquisition price.
Closing issues could be a challenge as companies will need to re-evaluate cost and revenue synergies and assess immediate liquidity needs.
In planning integration, organizations should take into account expediting the delivery of results, adjusting targets to match reality, increasing staff on projects, and ensuring clear and candid communication during times of uncertainty.
Some industries will see higher activity than others. For example, expect to see a spike in deals in the travel, transportation, and hospitality industries.
The TCS Promise – Support across the Entire Deal Lifecycle
With a successful track record of having delivered more than 200 M&A programs, we provide measurable outcomes including:
10-25% faster executions using agile delivery and Machine First Delivery ModelTM
15-25% lower delivery costs using TCS M&A factory model and global scale
15-30% lower transition service agreement (TSA) based on factory model and technology landscape
Shift from capex to opex using subscription services model
Minimal execution risks using TCS playbooks and alliance partners
Our areas of expertise touch on all critical stages of the deal including pre, day 1, and post. Our areas of focus include the following:
Clean room: setup
Operational due diligence
M&A program management (integration and separation)
Technology integration and digital transformation
TSA exit readiness
Functional integration, operating model and transformation
Organization change management
TCS helps with:
Strategic direction and execution support across the M&A cycle with our M&A Consulting and Services Integration
End-to-end transformation through integration or divestiture through our M&A Services
Simplifying M&A by decoupling IT systems from core functionalities before M&A moves and standardizing processes post M&A TCS Implementation Services for Oracle Netsuite Cloud Applications.
To know more about how TCS can help, please write to Hansen Blake.