M&A Framework for Success Short

Mergers & Acquisitions: Part 2 Practical Framework for Success - HighlightsSteve CooteDirector, VSC GrowthFeb 2011www.vscgrowth.com.auCopyright 2011. All Rights Reserved. VSC Growth

The MarketGloballyM&A transactions > US $2 trillion p.a. ($2,000,000,000,000)Transactions increasing post GFCEmerging markets now represent 30% of global volumeAustraliaM&A transactions > US $130 billion p.a. ($130,000,000,000)Current annual growth >10%

Source - Thomson Reuters Oct 2010

The Market - Why M&A?

To grow or protect shareholder value and returnsSource Towers Watson

The Research

The results of the research are presented in our: Mergers & Acquisitions Part 1 2011 Research Projectwww.vscgrowth.com.auContact Steve Coote on +61 412 148428 or steve.coote@vscgrowth.com.au

The research has been combined with our direct experience to provide practical guidance to those involved in M&A

Framework for success - IntroductionThe Framework for Success addresses the questions arising from the research:If the evidence shows such a consistently average track record, and there is so much guidance on how to do it well, then why doesnt it change?If we want to improve our approach, what are the fundamental things we need to?What support is available?

Framework for successSurprisingly the research didnt answer the question as to why, after 30 years, little has changed but perhaps??Incentives to grow companies outweigh the consequences of M&A failureCompanies continue to underestimate the resources necessary for integration and the realisation of synergiesSuccess relies on managing diverse and complex ranges of people and cultures and this is not easyIf the original M&A goals are not met, there is a tendency for 2nd best to still be considered a success

Framework for success - SummaryStep 1 Commit to improve on the status quoStep 2 Understand your M&A modelStep 3 Recognise the 3 key success factorsStep 4 Create a robust strategyStep 5 Develop your processes & peopleStep 6 Execute each merger diligentlyStep 7 Enjoy your success

Eliminate theseImprove some of theseIt is unrealistic to achieve perfection, but we should be seeking improvementWhat difference would this result make to your organisation?

Value CreatedValue DestroyedValue Maintained1/3 Destroy Value1/3 Maintain Value1/3 Create Value

Negligible Value DestroyedNegligible Value CreatedSignificant Value DestroyedSignificant Value CreatedFramework for Success Step 1 Commit to improve on the status quoMaximise theseCopyright 2011. All Rights Reserved. VSC Growth

Framework for Success Step 2 Understand your M&A model

The Deal(Pre-Completion)Implementation(Post-Completion)How do you currently do M&A, what works what doesnt? What do others do?Copyright 2011. All Rights Reserved. VSC Growth

This is our M&A framework; everyone knows what they have to doFramework for successStep 6 Execute each merger diligently

Deliver the promise of increased shareholder valueCelebrate what you do well Reduce your risks by learning from others mistakesBenefit from on-call experienceBuild the skills & confidence of your support teamUncover latent opportunities on old dealsFocus your energies where you can create the most value Be prepared when the next deal comes offEnter the next deal with greater confidence in the outcome

Framework for successStep 7 Enjoy your success

If you would like to create more value from your growth initiatives, VSC Growth is ready to help you:Mitigate the risks of bad dealsTurn average deals into value creatorsExtract value from already completed dealsBuild your companys success rate in M&AWe will do this by:Understanding your businessPersonal service and considered adviceExperience and a practical approachFocusing on creating enduring value

Framework for successContact Steve Coote on +61 412 148428 or email your enquiry to steve.coote@vscgrowth.com.au

www.vscgrowth.com.au

Want a closer look at the Framework?A more detailed outline of what works is addressed in our presentation: Mergers & Acquisitions Part 2 - Practical Framework for Success

The Framework combines our direct experience with the research to provide practical guidance to those involved in M&Awww.vscgrowth.com.auContact Steve Coote on +61 412 148428 or steve.coote@vscgrowth.com.au