M&A Risk in the UK Wealth Management Market II

Mind the information gap: how to avoid deal value degradation

“Games are won by players who focus on the playing field –  not by those whose eyes are glued to the scoreboard.” Warren Buffett

This second whitepaper in our new M&A series explores the information gaps that commonly emerge between pre-deal expectations and post-deal reality.

Ensuring buyers’ expectations are delivered is critical to M&A success.  Yet in our experience, crucial information is all too often missing from the deal room, leading to deal value degradation (DVD).

Below, we discuss the three most common causes of DVD – and how to mind the gap.

  1. Wrong model, wrong fit

In any M&A deal, there are two key roles: CEO and COO. The CEO sets expectations which the COO delivers.  These postholders need to think, and work, in lockstep to ensure the vision becomes reality. Insufficient information about exactly how ‘NewCo’ will materialise guarantees problems. All parties need to have a clear and shared understanding about the desired outcome of the merger. And this is not just about financial outcomes. You need to ask how will clients be served and how will they benefit from the deal? What will the (new, same or blended) product set be? How will operations and the underlying data and technology all be structured to support these?

In our first paper in this series, we discussed the importance of CEOs understanding the alignment of client segments to operating model capabilities, before entering a wealth management M&A deal, and how any misalignment can lead to DVD.  Building on that discussion, it’s vital that COOs feel …

To continue reading, download the full whitepaper here.

Meet the author

I use my strategic and technical knowledge of operating model design, client journeys, and process optimisation to support clients.