Minority of senior finance executives characterized their recent M&A as a true
TORONTO, Jan. 23, 2013 /CNW/ - Only one out of five finance executives who
have been involved in mergers or acquisitions during the past five years say
their transactions were very successful. However, according to Human Capital
Risk in Mergers and Acquisitions, a study conducted by the Canadian Financial
Executives Research Foundation (CFERF) and sponsored by Towers Watson,
executives are not deterred from future attempts at mergers and acquisitions
(M&As). The vast majority (more than 80%) of survey participants said they
were at least somewhat likely to do another M&A in the next 24 months.
This study aimed to pinpoint and highlight what the highly successful
companies did differently in their M&As from a human capital standpoint. The
research found that most companies with a recent history of "very successful"
transactions shared a set of specific strategies that were different from
"Human capital risk stands out as a critical area for the success of an M&A,
and, as such, requires management's attention as soon as an organization
enters into discussions with another entity," said Michael Conway, Chief
Executive and National President, FEI Canada. "Our research also shows that
companies that very successfully completed an M&A all paid unwavering
attention to human capital at all stages of the process, while this was not
the case for less successful transactions."
CFERF, the research arm of FEI Canada, conducted the survey of financial
executives across Canada and gathered insights from a research forum held in
Toronto. The study's findings highlight the perspectives of CFOs and other
senior finance executives on human capital risk in M&As.
Survey respondents indicated that they determined the success of their
transactions by measuring different metrics.
-- 69% of respondents measured revenue growth;
-- 63% of respondents measured achievement of specific synergies
other than cost reduction; and
-- 45% of respondents measured retention of key talent.
From the results of this study, it appears that the companies which were most
diligent about identifying people and cultural issues to address early in the
M&A process, well before the integration stage, were best positioned for a
successful M&A. It is clear that an early assessment of key factors must be
undertaken during the due diligence stage, not when the deal closes.
"In order to effectively manage a cultural integration, organizations should
upgrade their toolkit before the next deal" said Eric D'Amours, Account
Director & Canada Leader, Mergers & Acquisitions, Towers Watson. "When the
next transaction comes up, they would then be better prepared to prioritize
issues to be addressed as part of the due diligence process, including plans
to help employees cope with the upcoming change."
According to this study, companies with a history of greatest success in M&As
used specific processes and governance policies at all phases of the M&A
process from due diligence to implementation. This approach allowed them to
retain key talent and improve both employee moral and productivity.
Please click here to view the full report.
The Canadian Financial Executives Research Foundation (CFERF) is the
non-profit research institute of Financial Executives International Canada
(FEI Canada). The foundation's mandate is to advance the profession and
practices of financial management through research. CFERF undertakes objective
research projects relevant to the needs of FEI Canada's 1,800 members in
working toward the advancement of corporate efficiency in Canada. Further
information can be found at www.feicanada.org.
Financial Executives International Canada (FEI Canada) is the all industry
professional membership association for senior financial executives. With
eleven chapters across Canada and more than 1,800 members, FEI Canada provides
professional development, thought leadership and advocacy services to its
members. The association membership, which consists of Chief Financial
Officers, Audit Committee Directors and senior executives in the Finance,
Controller, Treasury and Taxation functions, represents a significant number
of Canada's leading and most influential corporations. Further information
can be found at www.feicanada.org.
Towers Watson is a leading global professional services company that helps
organizations improve performance through effective people, risk and financial
management. With 14,000 associates around the world, we offer solutions in the
areas of benefits, talent management, rewards, and risk and capital management.
Christian Bellavance, VP Research and Communications FEI Canada/CFERF
firstname.lastname@example.org 416-366-3007, ext. 5114 Eric D'Amours Account
Director & Canada Leader, Mergers & Acquisitions Towers Watson
email@example.com 416-960-4493 Sherry Boisvert 416-355-7418
Sherry.Boisvert@ketchum.com Stacey Grimshaw 416-355-7426
SOURCE: Towers Watson
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CO: Towers Watson
NI: FIN ECOSURV
-0- Jan/23/2013 13:00 GMT
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