It’s a basic goal that often isn’t achieved for complex reasons: When your company makes an acquisition, you want to create significant value — but you almost never do. One big reason is because integration usually fails to achieve go-to-market (GTM) goals. Consider what executives said in PwC’s 2020 M&A Integration Survey. Across the board, respondents ranked essential business growth areas as important, yet those goals were rarely completely achieved.
Why is this happening – or rather, not happening? While GTM goals can vary based on industry characteristics and customer personas, many acquiring companies face common challenges:
Any of these challenges can be difficult, especially as company valuations have generally risen in recent years, elevating acquisition prices. Achieving all of these objectives is even more daunting, which explains the overall lack of success revealed in the survey. Only 13% of executives reported very favorable results in capturing revenue synergies, and only 10% reported the same with cost synergies.
What can acquiring companies do? Converting GTM goals to reality requires a strategy that encompasses collaboration, communication, sharing information through cross-functional coordination and GTM leadership with an executable operating vision. Each group within the company has its own goals in an integration, and focusing on those can naturally lead people to stay in their lane. But when you enable teams to go beyond simply streamlining individual operations and widen their perspective to consider the entire organization, you’re more likely to realize synergies while integrating GTM functions.
If you wait until after a deal closes to start thinking through cross-functional coordination, it will be too late, and protecting and creating value will be a lot less likely. The GTM framework spans the entire deal cycle, with specific actions taken at specific stages. These actions can combine to chart a course for achieving revenue synergies — in which the merged company could generate more sales — and realizing deal value.
Protecting value during integration can put an acquirer in a better position to create lasting value in the long term. That means going beyond cost synergies to pursue revenue synergies that can significantly boost growth potential. Whether it’s deepening penetration with existing customers or winning entirely new customers, consider how four objectives — cross-selling and upselling, pricing and discount improvement, route to market, and net-new customer acquisition — can work together to help drive growth.
None of these objectives can be achieved overnight, and it’s not a matter of months, either. Unlike integrating individual functions, GTM integration is a long-term game in which real value creation usually doesn't happen for at least a year. But when managed well, the investment and effort can pay off. Leaders who take time to understand the above-mentioned elements of GTM integration — and the keys to protecting and creating value — can execute a smoother transition to a truly combined company.
Deals Principal, PwC US
Advisory Principal, PwC US