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What Shape is Your Curve? |
Curves are magnificent things. Mergers have curves too.
Synergy curves. They reveal the measure of
attractiveness of the deal, either up front as part of a
due diligence exercise or when evaluating the deal's
ultimate success.
For mergers, there is a window of opportunity for
capturing the most benefits. A synergy curve defines
this window and, ultimately, the success or failure of a
merger. The result of months of preparation, planning,
and implementation, the curve shows the accumulation of
synergies over time. In successful mergers synergy
curves are defined in the early stages and used as a
driving force for the integration. A merger with a sense
of urgency is far more likely to reach its full
potential and by plotting a synergy curve during the
planning of the merger senior executives can see the
speed at which synergies could be delivered and track
the planned accumulation of synergies over time.
Plotting a curve also helps clarify the deal's strategic
rationale, fundamental to maximizing synergy delivery.
As the deal progresses through announcement and toward
close, the curve's accuracy can be refined as more data
is made available. |
