Printer Friendly

Judith Holley


Acquisition can become a tempting component of corporate growth strategy in times of slow organic growth. However, research consistently indicates that over half of M&A deals fail to create value - basically, more often than not this comes down to a coin toss.

It might be tempting to wait for the right deal to be presented by an external advisor, but by the time the pitch book arrives, it is probably already too late. Given the high stakes and risks associated with M&A, investing senior executives' time, money, and organisational focus to help overcome the various challenges of M&A-driven growth - in advance of any particular deal - must pay for itself many times over.

Although every M&A approach contains elements that are unique to the company or industry and not all businesses aim to become a serial acquirer, the kaizen-like approach of Danaher - from finding to buying to integrating - provides some insights into a panoply of best practices it has refined over the ~400 acquisitions it has made over the past 35 years.

Danaher, an industrial products and hand tool manufacturer, operates more like a holding company that buys and builds companies. Until its latest deal (the acquisition of Pall for US$13.6b in May 2015, twice the size of its largest previous purchase), its focus had been on medium-sized acquisitions that are then systematically exposed to its operational excellence. As a result, its member companies have become B2B category leaders, consistently offering high-quality, reliable products and solutions in what otherwise would be a diverse group of professional, medical, industrial and commercial enterprises. This drove the company's total shareholder return to increase by 70,000% since the early 1980s versus 5,000% for the S&P 500.

So what explains Danaher's ability to deliver successful acquisitive growth in a consistent manner when so many other companies stumble?

1. An investment thesis that takes into account the company's operational foundation, its current context and economic realities. It goes beyond generic strategy statements such as "strengthen our Asian markets" to identify how the company will compete and create value over time e.g. why us? why now? how do we get there?

A good investment thesis should be specific enough to clarify where the company wants to increase its exposure i.e. where it should be pro-actively looking for transactions to avoid 'me too' or off-strategy transactions that are unlikely to add value.

backyard liberty review http://www.jennreviews.com/backyard-liberty
5 inch height gain review http://www.jennreviews.com/5-inch-height-gain
lovetraction lines review http://www.jennreviews.com/lovetraction-lines
forex mentor pro review http://www.jennreviews.com/forex-mentor-pro
defeating diabetes kit review http://www.jennreviews.com/defeating-diabetes-kit
learn more study less review http://www.jennreviews.com/learn-more-study-less
mind secrets exposed 2.0 review http://www.jennreviews.com/mind-secrets-exposed-20
the millionaires brain review http://www.jennreviews.com/the-millionaires-brain
thought elevators eric-taller review http://www.jennreviews.com/thought-elevators-eric-taller
numerologist review http://www.jennreviews.com/mike-madigans-numerologist
survive the end-days review http://www.jennreviews.com/survive-the-end-days
67 steps tai lopez review http://www.jennreviews.com/67-steps-tai-lopez
manifestation miracle review http://www.jennreviews.com/manifestation-miracle
plan my baby review http://www.jennreviews.com/plan-my-baby
pure reiki healing mastery review http://www.jennreviews.com/pure-reiki-healing-mastery
children learning reading review http://www.jennreviews.com/children-learning-reading
the online dog trainer review http://www.jennreviews.com/the-online-dog-trainer
tao of badass review http://www.jennreviews.com/tao-of-badass

Danaher has a rigorous system for identifying and bidding on potential acquisitions. It seeks industrial brands with at least $1 billion in sales and a 5% annual growth rate in an attractive niche market such as environmental control or hand tolls, with no exceptional competitors. There should be a clear potential for margin improvement.

2. Clearly laid-out M&A principles. Danaher has implemented a structured end-to-end process from deal sourcing to integration supported by a short list of principles designed to take time and cost out of the M&A process.

Thanks to such principles, Danaher focuses its attention on the issues that matter most at each stage of the transaction process. For example, during due diligence, it develops early a short list of key commercial deal-breakers and focuses the largest part of its efforts on resolving them. During bidding, it calculates a 'walk away' value to ensure the company does not overpay for the deal.

3. Expertise that generates value for the acquired business - in the case of Danaher, operational improvement. One of Danahers' earliest acquisitions, the brake-maker Jacobs Vehicle Systems, had started to experiment with a Toyota-style lean manufacturing system. It worked, and Danaher began rolling out what came to be known as the Danaher Business System.

Thanks to this systematic process, Danaher can quickly harvest the benefits from business acquisitions through cutting costs and expanding margins. It uses a unique set of continuous productivity improvement tools which has evolved over time to include a large number of business activities e.g. research and development, go-to-market activities, and plant, supply chain and backroom operations.

Guest Book

If you would like, you can add your name and a short message to our Guest Book. Thank you.

Sign the Guest Book

Records 1 - 25 of 1,001+

Iris Silvia
Tue, Apr 24, 2018
You've got among the best web-sites.
Feel free to surf to my homepage; Play matka ( %url )

Wanda
Sun, Apr 22, 2018
Thanks pertaining to offering such awesome post.
Here is my webpage :: Best Movie review of A Quiet Place ( %url )

Oliva
Sun, Apr 22, 2018
Wow, lovely site. Thnx ...
Also visit my page: judi slot joker123 indonesia ( %url )

Marcelo Sedillo
Fri, Apr 20, 2018
Great looking web site. Think you did a lot of your own html coding.
Here is my website; Allo Resto ( %url )

Amee Barringer
Fri, Apr 20, 2018
say thanks to a lot for your internet site it helps a great deal.
my website: Ipe Decking ( %url )

Shenna
Thu, Apr 19, 2018
Good Webpage, Carry on the beneficial job. Thanks.
Also visit my blog post :: Currency Converter Euros to Dollars 2018 ( %url )

Jodie
Sun, Apr 15, 2018
Maintain the amazing work !! Lovin' it!
Also visit my web page :: rental mobil di surabaya ( %url )

Hermelinda Frank
Sat, Apr 14, 2018
Nice Site, Maintain the great job. Regards!
Also visit my page :: ( %url )

Vivien Jerome
Thu, Apr 12, 2018
Good page, Continue the useful job. Many thanks!
Also visit my blog post :: Buy Automatic Instagram Likes ( %url )

Roscoe
Thu, Apr 12, 2018
Great internet site! It looks extremely expert! Sustain the great job!
Feel free to visit my homepage: Things to do in Punta Cana ( %url )

Sidney Geils
Wed, Apr 11, 2018
The posts is amazingly interesting.
my site; how to day trade ( %url )

Orville
Mon, Apr 09, 2018
say thanks to a lot for your site it assists a lot.
Also visit my site - remote video sign language interpreter ( %url )

Val Dolan
Mon, Apr 09, 2018
I value the data on your website. Thanks a bunch!
Also visit my web-site dich vu decor ( %url )

Judson
Sat, Apr 07, 2018
Keep up the helpful job and bringing in the group!
Have a look at my webpage; best financial advisor whittier ( %url )

Lemuel
Sat, Apr 07, 2018
You've gotten possibly the best websites.
Here is my page; Bar Marsella ( %url )

Maik
Fri, Apr 06, 2018
Wow because this is great work! Congrats and keep it up.
Review my homepage ... Eyaculacion precoz tratamiento ( %url )

Shelli
Fri, Apr 06, 2018
I adore this site - its so usefull and helpfull.
Feel free to surf to my blog TED storytelling ( %url )

Nicolas Morin
Wed, Apr 04, 2018
You've gotten among the best web sites.
Have a look at my page; Link Alternatif Omdomino ( %url )

Lori
Wed, Apr 04, 2018
thank a lot for your site it assists a lot.
my weblog - bokep ( %url )

Alyce
Tue, Apr 03, 2018
Merely desired to tell you Now i'm happy that i came on the site.
Feel free to surf to my website :: dong ho doc ( %url )

Byron Keck
Tue, Mar 27, 2018
Sustain the great work and generating the crowd!
Look at my web page ... Leczenie lekomanii ( %url )

Jay Breaux
Sat, Mar 24, 2018
Maintain the helpful job and delivering in the group!
My blog - Serverless ( %url )

Adelaide
Thu, Mar 22, 2018
I value the content on your websites. Appreciate it.
Visit my web blog website laten maken ( %url )

Mable
Thu, Mar 22, 2018
Passion the site-- really individual pleasant and lots to see!
Visit my web page - Meja 303 ( %url )

Lida
Wed, Mar 21, 2018
Thanks! This is definitely an terrific internet site.
Feel free to visit my web page - neurolog warszawa ( %url )

Records 1 - 25 of 1,001+