Research has shown that 65% of acquisitions fail to deliver long-term shareholder value. Remarkably, this level of failure has remained consistent over the last 20 years. It is not just the acquirers who are failing to deliver full value from a transaction – a seller will often lose value due to poor planning and packaging of the actual asset or business being sold.

Undertaking merger and acquisition (M&A) activity, whilst trying to create value, has become more complex. Across many sectors, the search for a successful M&A has become more attractive and competitive. Businesses are now seeking innovation through technologies and markets which bring a strategic advantage and profitable scale. In parallel businesses are looking strategically at their portfolio of assets to determine where they should focus their capital and talent. Our Integrations and Separation Advisory team help clients unlock deal value and reduce risk from M&A, Divestitures and JVs through effective design, planning and execution that span the entire deal lifecycle and across the entire business value chain. This includes, pre-deal Operational, Technology, Carve-out, Integration diligence / planning and post deal carve-out, Integration implementation including Day 1 readiness.

In a rapidly changing business environment, M&As and divestures are levers to rapidly transform a business, gain technological edge over peers and create value. Yet many buyers face business disruption during transition or fail to realize planned synergies. On the other hand, sellers struggle to prevent leakages during carve outs. Very often, value destruction is due to lack of planning for complexities involved in business transitions. Clearly defining the deal perimeter, focusing on resolving existing entanglements and mobilizing teams to deliver results rapidly is key to successful integration and separation.

Ravi Sinha

Partner - Deal Advisory, Integration and Separation Leader

KPMG Lower Gulf

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With growing appetite for M&As in the GCC region, focus should be on making sure that well-executed transactions are supported by robust plans. Whether an integration or a separation, drawing up a well-defined plan from the outset is key to increasing buyers’ confidence in targets’ ability to deliver on strategy and synergies, and maximize sellers’ value in the form of higher premiums.
 
KPMG Integration and Separation experts focus on delivering real, long-term value to clients at all stages of the M&A lifecycle by reducing transaction risks, designing operational improvements, and supporting deals’ execution from the ground up. Our integration and separation approach, tools and methodology have been created to unlock value and successfully deliver even the most complex M&As, applying five key principles: 
  • Plan for Day 1 early on and align the integration or separation approach to the deal’s rationale
  • Be value-focused by capturing all synergy levers and robust realization plans
  • Enhance your bargaining power by controlling the cost narrative
  • Minimize operational risks by designing Transition Service Agreements (TSAs) that allow smooth change of ownership
  • Be stakeholders focused and communicate changes early to avoid flight risks

How we support our clients

KPMG Integrations and Separation Advisory team helps clients unlock long term value and reduce risk from M&A, Divestitures and JVs through operational planning and execution and is part of KPMG’s deal advisory network which brings together comprehensive M&A, financial, operational, technology, and people and change expertise.

KPMG’s global Integration and Separation network includes over 1,000 integration and separation specialists. KPMG Lower Gulf counts comprises 1,783 professionals providing Advisory, Tax, and Audit services and is part of KPMG’s global network of over 236,000 professionals.

Our integration and separation services

To help the firm’s clients realize value at a rapid pace, KPMG’s Integration and Separation professionals bring a wealth of expertise in the following services:

Integration planning & execution

Whether a selective or full merger, buyers’ objective in an integration is to create lasting, tangible value for the combined business, eliminate redundancies, and expedite the transaction without disruption to operations and loss of business. To achieve this objective, focus should planning for the integration early and conducting thorough due diligence on the target.

How KPMG can help

Pre deal

  • Perimeter definition, integration assessment, and buy-side due diligence
  • Entity set up support, integration blueprint and roadmap

Post deal

  • Integration office management, change management, and synergy tracking
  • Day 1 and Day 100 planning and deal execution

Separation planning & execution

Sellers’ target in a separation is to maximize the target’s deal value, minimize risk, and preserve value for the retained business. To achieve this objective, focus should be on designing the right separation blueprint and getting the target ready for Day 1.

How KPMG can help

Pre deal

  • Rapid carveout assessment, perimeter definition, Day 1 readiness
  • Carveout, operations and technology vendor due diligence
  • Separation blueprint and planning including

o   Target operating model

o   Separation and standalone cost assessments

o   Stranded cost assessment for the retained business

o   TSA / reverse TSA development, management, and exit

Post deal

  • Separation Office Management, Day 1 and Day 100 execution

Value creation

With the right synergy identification and value creation plan M&As help unlock incremental gains for the combined business. Focus on value creation planning in the early stages of the deal is key.

How KPMG can help

  • Synergy and cost to achieve assessment and realization
  • Operating model option analysis basis on synergy potential
  • Business transformation

Joint ventures

Having a comprehensive approach in place and encompassing all critical areas of the operating model is key to successfully set up and operationalize your joint venture.

How KPMG can help

  • Joint venture formation support including:

o   Entity setup coordination support

o   Asset transfer and financial consolidation coordination support