What it is, when it makes sense
Chemical companies have historically been very active in reshaping their business portfolio through M&A and carve-outs. The slowdown of organic sales growth in the last decade in most regions has accelerated this trend, with industrial as well as financial actors driving the number of transactions as well as prices and multiples up. This makes it in turn more difficult to create value – especially on the buyer side – and raises the bar for companies that want to enter this risky, albeit lucrative, game. Also the complexity is growing: in recent years we are observing a higher number of bigger mergers of equals (e.g. in the agrochemicals sector) and activist investors more frequently leading the action in M&A. Chemical companies have therefore to pay particular attention not only on the pre-deal and deal phase (including the target identification, due diligence, case definition, and negotiation), but also on the post-deal phase (including the integration and synergy realization). Our „merger & post-merger management“ approach supports a chemical company management throughout the entire journey to value.
What you get
Our „Merger & post-merger management“ usually is shaped to deliver 4 items:
- Target selection, e. a list of potential target companies that could fit into the strategic purpose of a chemical company, as well as the ranking in terms of strategic and financial fit.
- Market and/or operations due diligence, e. the identification of risks and opportunities from the target´s business – incl. synergies with the buyer company – as well as their quantification for the price negotiation (e.g., NPV model, sales and purchase agreement, transition agreement etc.)
- Integration plan, e. the operationalization of the activities necessary to integrate the new business into its new parent company after the deal is cleared.
- Post-merger integration management, e. the set-up and coordination of joint teams from both target and parent company to secure integration and synergy capturing, including a strict financial progress tracking and regular interaction with the parent company management.
How we work
This type of engagements typically go over 1 to 2 years. The staff is typically:
- One senior project / integration manager with experience in transactions
- One-three experts for the business processes in scope (e.g., sales & marketing, manufacturing, maintenance, procurement, supply chain management, etc.)
- One-two change management experts, where necessary.