Assessing Deal Value

M&A studies indicate that many acquisitions fail to generate value for buyers, yet surveys suggest deal makers believe the opposite is true. PwC’s value consultants can help improve the odds of success by increasing your diligence of valuation issues, including:

  • Cash flow assessment
  • Independent value development
  • Reconciliation with other diligence findings
  • Synergy analysis
  • Value driver/sensitivity analysis
  • Model assessment

Value perspectives

What is a target business worth? That question should be answered from the perspective of “value to whom?”

There is no such thing as intrinsic value. Rather, there is value in the hands of one operator, or value in the hands of other operators. Failure to consider the value of a target business from the perspective of different potential operators is a common trap for companies involved in transactions.

To help you avoid this trap, PwC’s value consultants, working with our strategy colleagues, analyze business portfolios based on value creation opportunities in the hands of the most-capable operator. This value perspective landscape is then compared with potential deal price, taking into consideration the transaction environment (e.g., competitive auction, private sale, etc.) to inform a negotiation strategy.

Assessing deal value
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From value commitment to value capture

In a buy-side transaction, getting a deal done at the right price is only part of the solution for achieving success. Efficiently and effectively integrating an acquired company and systematically capturing value in the process are the other critical pieces.

Working with our M&A advisory colleagues, our value consultants illuminate annual value creation commitments embedded in a deal price. We then help tie those commitments directly to value capture plans in the integration process. Particular focus is given to synergies, including prioritization based on value impacts that consider timing, cash flow, and probability of success.

Contact a member of our team to explore how we can help you improve your approach to Assessing Deal Value.

For more information, contact Aaron Gilcreast or download a PDF describing our approach.