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Own the moment and pivot quickly
As a business leader, you know that today’s decisions define tomorrow’s value. Whether you’re pursuing an acquisition, considering a divestiture or looking to improve your enterprise performance, having a value creation plan has never been more important.
The value bridge
A value bridge reveals the many value levers for any given deal. This can help identify and evaluate the strategic agenda for value creation, both organic and inorganic, so you can prioritize initiatives that will capture the most value. Each company is unique, as are its transactions. So, too, is their specific value bridge. But the mindset of viewing every dimension of a deal as a lever for value applies to any transaction.
Anchoring the baseline, identifying historic value drivers, and establishing value creation plan.
Diligence includes:
- Commercial
- Cyber
- Financial
- Human resources
- Information technology
- Operations
- Regulatory
- Tax
Determining which capabilities are needed to capture the greatest value and how businesses should be repositioned.
Examples:
- Assess M&A: disposals, targets in new markets, and skill or technology gaps
- Reallocation of investments to create competitive advantage
- Capitalize on future value drivers for the business, its markets, and adjacencies
- Identify market threats, risks and opportunities, as well as opportunities for cost base realignment
Leveraging existing capabilities and identifying new opportunities for business improvement.
Examples:
- Optimize product, channel and customer strategy as well as internal structure
- Highlight headwinds early to mitigate impact on deal value (e.g. contracting terms)
- Review and assess the operating model fitness for growth
Allocating capital to effectively run existing businesses and expand portfolio.
Examples:
- Optimize net working capital to release cash and reduce debt
- Eliminate unnecessary tax leakages and establish a tax-efficient supply chain
- Optimizing debt and capital structure
Today's value creation ecosystem
Reconfiguring to compete successfully in the 21st century requires a business to flex and upgrade critical capabilities such as strategic direction-setting, resource allocation processes, and governance, which together enable the deployment and recalibration of operating assets. Stretching these same capabilities is also crucial for leaders if they are to make their companies more resilient and more purposeful contributors to society, thereby creating, or at least avoiding the destruction of, enterprise value.
Tomorrow’s deal dynamics
While the economy has been upended by the pandemic, a majority of companies aren’t changing their M&A strategy as a result. Explore five drivers that are reshaping the business environment and their impact on deals.
Learn more
Deals industry insights
The M&A recovery that began in the second half of 2020 will accelerate in 2021, as corporate and private investors have access to capital and can pursue deals to build scale and expand scope.
Learn more
Creating value beyond the deal
Those who genuinely prioritize value creation early on – rather than assume it will happen as a natural consequence of the actions they take as the transaction proceeds – have a better track record of maximizing value in a deal.
Learn more
Evolve with agility
Deals are shifting to transactions that can deliver value in a slower economy. As they face a higher bar for success, companies need to be nimble while still achieving the essentials of M&A integration.
Learn moreValue creation at PwC
Helping you unlock value across your business, our diverse team of experts works with you to define new approaches to value creation—from making your business more resilient to bolstering sustainable performance.
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