I spent an interesting Thursday morning at the Conference Board's annual
post-merger integration meeting in New York, speaking on a panel and hearing a couple of good presentations by Clayton Deutsch, who led the conference for sponsor McKinsey & Co., and Moni Miyashita, who leads the M&A integration operation at IBM Corp. (NYSE:IBM).
Miyashita outlined the end-to-end approach to integration IBM employs in its 12 to 15 acquisitions a year, illuminating what by now may be the most comprehensive PMI process out there. New since we
wrote about integration at IBM in 2007: stepped-up use of the company's M&A Accelerator tool, including a "Deal at a glance" page that "keeps everyone focused on why we bought the company," as Miyashita put it.
Not surprisingly she didn't touch on the recent
departure of her boss, Dave Johnson, for Dell Inc. (NASDAQ:DELL). But if it's any consolation in Armonk, N.Y., her talk was a reminder that Johnson leaves behind quite an M&A organization.
Most striking in Deustch's remarks was his observation that there's a lot of pent-up M&A ambition in executive suites out there, with CEOs eyeing an economic landscape such as most of us have never seen and thinking about "transformative" deals, some maybe wiser than others. Not necessarily tomorrow: Deutsch also said he thinks we're still in the first half of the downturn, and that it isn't until the second half of a recession that M&A really gets going.
As I pointed out on our panel, this interest in transformative deals contrasts with what I'm hearing from corp dev folks, who (if their companies are strong) are more likely to be going over their watch lists, wondering if they should explore distressed deals and struggling with valuation issues and earnouts.
Of course, most corp dev folks aren't mandated to launch transformative deals. Those are CEO initiatives. But based on Deutsch's remarks (which were seconded by panelist Anton Shahazizian, investment banker at UBS) more than a few corp dev teams may find themselves working on such transactions one of these days. -
Kenneth Klee
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Juergen Lasowski
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I agree with Moni Miyashita of IBM wholeheartedly that having a "deal at a glance" page is a critical component of managing the PMI process. Any business with M&A activity should have a framework that allows them to track all of their critical KPI's (key performance indicators) for any aspect of the M&A transaction. How else can the M&A team track progress and get real-time status on their M&A projects without a mechanism that tells them the status of their individual KPI's? Dashboard technology is an excellent method of monitoring the KPI's of a deal (pre-close and integration) so that all parties involved are aligned no matter what stage or function.
Juan Tosoni
Founder & CEO
TX2 Systems, Inc.
www.tx2systems.com