m&a (2017) - corporate development executive insights
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15% 71% 14%
Corporate Development Insights TMT Sectors
FTI Consulting’s recent survey of over 100 corporate development leaders revealed that the rate of external innovation is outpacing the rate of internal innovation.
About FTI Consulting FTI Consulting is an independent global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. FTI Consultingprofessionals, located in all major business centers throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges and opportunities.
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Survey MethodologyFTI Consulting conducted an informal and online survey in 2016. Audience/participants (~100 individuals), included leaders from corporate development, M&A integration and functional specialists in various TMT sub-sectors.
Nitin Kumar Senior Managing Director +1 408 915 [email protected]
69%Plan to complete > 3 acquisitions in 2017
44%Engaged external
consultants for integration above a certain size
threshold
77%Engaged external advisors
in the pre-deal phase
27%Would consider a
divestiture over the next 12 months
Primary reasons for pursuing new deals in 2017
Explore new business models
Acquire new skills and capabilities
Access new channels and markets
Add Adjacencies
Sector is consolidating
Attain scale
Pre-emptive strikes
M&A Integration approaches need to adapt to new types of deals and create value beyond protecting the target, just PMO the integration or take cost out.
24%
37%
13%
26%
21%
19% 19%
14%
11% 11%
5%
Embedding insights from future trends in strategy
Balancing risk across portfolio
High valuations Uncertainty from political environment
Ability to integrate and realize value from target
Headcount limitations
Aligning Corp Dev and Corp Strategy
64% respondents do not
consistently support decisions through data
Business model transformation, new market entry, and talent acquisition will drive M&A activity in 2017.
Flexible and adaptable M&A strategy
Identifying capability gaps where strategic partners are either necessary / beneficial
Volume of deals should drive budgets and resources
Functional Integration skills outweigh IMO
A
B
C
D
E
F
G
H
I
J
K
Areas of improvement in 2017Key Challenges for 2017
H
IJ
K
A B C D E F G
Use disruption as portfolio assessment criteria
Use financial performance
Do not use either metric
A
B
C
A B C
66% respondents expect
corporate development budgets will stay flat even if deal volumes increase
41% respondents are likely
to add headcount in 2017
Corporate Development Organization
16% respondents conduct
structured portfolio reviews
81% would
consider buying AI or machine learning capabilities