Rethinking the M&A process: Learning private equity’s secret to outperforming corporate strategic acquirers

Abstract

Purpose Although M&A transactions often destroy shareholder value for corporate strategic buyers, PE firms, whose business model is predicated upon repeating M&A, have a better record of creating value for their investors. Design/methodology/approach The critical aspects that comprise the PE playbook are organized around the three main deal phases Pre-deal, Deal and Post-deal. Findings Research has found that 60 percent of surveyed strategic buyer executives indicated their companies do not have a comprehensive end-to-end M&A approach using a playbook. Practical/implications Ample evidence exists demonstrating that corporate strategic buyers experience significant difficulty in creating value from their transactions. Originality/value Though many view PE firms as value-destroyers, various peer-reviewed studies have found that PE-backed firms have a surprisingly favorable record.