Creating Value: Well Executed Acquisitions

Updated: May 31, 2024

Key Insights

Prudent planning and executing are paramount for driving value creation.
Targets should be evaluated carefully for meaningful opportunities to maximize post transaction value.
Integrating administrative functions, legal structures and IT systems early can help build significant value downstream.

Creating Value is a Process

Value is not generally created by the acquisition itself, but rather by executing on a range of value levers relevant to the business. M&A activity alone does not guarantee value creation and, when poorly executed, can have the opposite effect. For M&A to create value, planning, and execution are paramount for driving value creation.

Driver of Sustainable Growth

Potential targets should be evaluated for opportunities to add accretive value. These may include:

Revenue Growth	Operational Improvements
Marketing strategy to increase volume/price. Cross-selling in existing and acquired markets. Geographic expansion/entry into new markets.	Renegotiating supplier terms or changing suppliers leveraging economies of scale. Consolidating Selling, General, and Admin expenses. Automation or outsourcing certain business functions.
Optimization	Consolidation
Divesting underperforming units/non-core business units. Reducing excess capacity or eliminating redundancies. Revitalization of an underperforming business.	Acquiring multiple industry participants to eliminate competition and/or gain market share. Improve underlying capital structure and associated lending terms. Further accelerate growth and operational efficiency opportunities noted above.

Planning and Integration

A well-considered communications plan (internal & external) is critical to ensure buy-in. Creating a 100-day plan provides a blueprint for attaining and measuring synergies identified during the diligence process.

Consideration should be given to what systems and administrative functions could be integrated such as legal entity rationalization, accounting systems, IT, and ERP systems. This area is often overlooked and can create significant value, especially for any downstream exit.

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Experience in M&A, corporate finance, business valuation, and private company operations, Bonfire Capital aligns stakeholder interests and delivers exceptional client experiences. Our collaborative approach, rooted in advising and managing private companies mitigates transaction risk. We bring a flexible approach to mandate scopes and are recognized for being nimble and relatable.