Transformation through deals is like a turnkey solution for your transformation process
The world around us is changing at unprecedented speed. New technologies, the proliferation of highly specialized start-ups, and changing customer needs are forcing business to accelerate their transformation processes. Organizations that dare not transform will find it difficult to thrive in this new reality. The right investment strategies can help an organization develop the necessary agility to react, respond and KPMG's transformation through deals solution brings different specialists together in a multidisciplinary team to support your transformation process from A to Z.
Changing times puts 'purpose' first
Social change leads to adaptive innovation. This is a natural part of the business environment, but the velocity at which companies have had to streamline, invest and reorganize their business models, functions and operations in the wake of COVID-19 is unprecedented in living memory.
That change is a constant is nothing new, but the acceleration of the transformation that has been kick-started in 2020 should be a wake-up call for all companies. It’s no longer just the ability to adapt that matters, it’s having the reflexes and agility to do so effectively, under adverse conditions, that separates the companies that thrive from those that just about survive such periods of turbulence.
"We notice that many organizations are currently facing an uphill climb, and not everyone will reach the top," says Yann Dekeyser, Partner at KPMG Deal Advisory. "KPMG not only wants to help companies reach the top, but to also focus on what happens when you get there, and afterwards" adds Dekeyser.
KPMG has conducted a strategic thinking exercise to identify the themes that will help companies build resilience in a new reality. The themes include elements such as changed customer expectations and behavior, new ways of working, a customized supply chain and production, and a renewed labor market.
However, according to Yann Dekeyser one theme stands out. The most important theme is the renewed focus on the 'purpose' of a company, with a clear sense of objective and role in society. Above all, this means that for many organizations profit is no longer an end goal, but rather a means to pursue another, clearer goal. Dekeyser cites Tesla as an example, "Elon Musk's goal is not to build electric cars and make a profit with them. Elon Musk's goal is to electrify the world. Profit comes second and follows from the pursuit of this ultimate goal," says Dekeyser.
Many organizations are in the process of re-evaluating which strategies and activities fit within their focus or "purpose", and not all of the existing functions and structures within the organization will support this new goal. Any number of changes may be required. New competencies may need to be developed and some parts of the organization may no longer be relevant. Far-reaching strategic changes force business transformation to take place.
Transformation through deals as a total solution
Transformation can be achieved in different ways. Some companies work out a self-driven transformation process with a timeline of several years, but through transformational deals this process can take place a lot faster. Companies choose to either develop new competencies and insights under their own steam or gain them through acquisitions. Meanwhile, a company may also choose to sell certain parts or activities that do not fit their 'purpose'. This frees up room for investments in activities and companies that are more aligned with the company’s strategic direction. KPMG supports companies throughout this challenging process using our 'transformation through deals' solution.
Transformation through deals helps organizations to embrace the disruption of new market entrants, new products, and new customer expectations. The right investment strategies, such as acquisitions, partnerships or divestments, can help an organization develop the necessary agility to facilitate business transformation.
Transformation through deals is a complete, integrated, transaction-related service, specifically designed to support a merger, acquisition or sale. "With our 'transformation through deals' solution, KPMG not only assists you during your due diligence or tax structuring, but also guides your transformation from A to Z. We consider a deal as part of a complete transformation and always start with the 'why'. Together we look at the ultimate goal and strategy of the transformation, and then determine how a deal or transaction can support you in this. KPMG also helps you to integrate your acquisition into your current strategy or purpose in order to complete the transformation process," Dekeyser explains.
Dekeyser compares KPMG's 'transformation through deals' approach to building a house. "If you want to build a good home, you need a team of several different specialists to do so. You are going to look for a good bricklayer, plumber and electrician. Even if you hire the best professionals, it doesn't guarantee that these people will work well together. In the housing market, this problem is nowadays solved by the ever-increasing supply of turnkey houses. In such projects, one complete end product is delivered and the owner of the house should not have to worry about the cooperation of individual specialists."
With the same philosophy, KPMG developed the 'transformation through deals' solution, which brings together different specialists in multidisciplinary teams to offer a one-stop solution.
"KPMG has many years of expertise in the field of taxation, finance and strategy. By combining that expertise with the knowledge of our legal specialists and integrating it with thorough data research and change management, KPMG is perfectly positioned to guide your entire transformation project from strategy formation to integration and value creation," underlines Dekeyser.
Transformation through deals in practice
KION Group, a multinational manufacturer of material handling equipment, called in the help of KPMG to guide their transformation through transactions. The company specialized in intralogistics equipment for warehouses and industrial trucks but found that it was neither ready for the emerging technologies of competitors, nor for the specific logistics needs of the growing e-commerce market.
The industry's new focus on e-commerce and associated automated picking led to a necessary transformation within KION. With the help of KPMG and the integrated 'transformation through deals' approach, KION was able to acquire a Belgian and an American company in order to obtain the necessary new expertise. Because of this transformation, KION is now specialized in offering 'dark warehouses'. A 'dark warehouse' is a fully automated warehouse in which hardly any human labor is used. The activity continues, even when the lights are off.
Thanks to the support of KPMG, transformation through deals and the right investment strategy, KION was able to focus on their actual objective and develop the necessary competencies to embrace the emerging disruption.
About transformation through deals
The world is changing fast and business models are evolving in response to megatrends such as digitalization, distributed workforces, and sustainability. Many companies are evaluating and reformulating their purpose, goals and strategy, often resulting in a thorough overhaul of their various business activities. The right investment strategies can help an organization to develop the necessary agility to stay relevant and competitive, using carefully considered and well-executed disposals, acquisitions and partnerships.
KPMG's transformation through deals solution brings different specialists together in a multidisciplinary team to support your transformation process throughout every phase, from strategic conception, to deal execution, to implementation.
Our experienced team understands that deals are just one part of a larger transformation. We keep our eye on the bigger, long-term picture, as well as the short-term motivation for a deal, and always start with the 'why'. Working together with you and your team, we first look at your ultimate goal and strategy, and then determine how a deal or transaction can support this objective, helping you integrate your acquisition into your current strategy or align it with your purpose and values to complete the transformation process.
Throughout the process, we aim to be a critical friend, both supporting and challenging you to uncover any blind spots, so that you can be confident of your decision-making every step of the way.