1. scott.slater@metavante.com 612.922.9990
Investment Technology Services
Merger and Acquisition Due Diligence
J. Scott Slater, Managing Director, Metavante Wealth Management Consulting Practice

2. M&A Objectives Business strategy first
“Triumph of hope over experience”
Most acquisitions fail (60-70%, depending on the study)
Study: 89% of acquired businesses lose market share
M&A is one of many strategies
Build-Buy-Partner
50 years ago: focus on organic growth
Today: M&A is the preferred growth vehicle

3. M&A Objectives So why are you seeking acquisitions?
Enter business you are not in
Broaden geographic footprint
Scale to drive productivity and efficiency
Defensive: competitive preemption

4. Successful M&A Disciplines
Characteristics of successful acquirers:
Clearly defined acquisition strategy
Disciplined acquisition mechanics
Tightly defined target criteria
Due diligence discipline
Ability to integrate acquisitions
Planning
Move quickly

5. Successful M&A Disciplines
Pre-Due Diligence:
Acquisition Targets:
Define what you want
You do the looking – not just the bankers!
“Synergy”:
Seek related businesses
Define what you bring to the table
Stay disciplined:
Set and stick to financial hurdles: be willing to walk
Expect the unexpected: don’t overestimate what you can achieve

6. Successful M&A Disciplines
Do the Due Diligence:
Financial
Dig: read the footnotes!
Private equity approach
Evaluate management – and your retention plans
Assess cultural fit

7. Successful M&A Disciplines
Operations
Operations: Can you take out cost? Should you?
Assess correlated businesses
How will you integrate the acquisition?
Objective evaluation of operating performance
Controls
Key performance measures
Regulatory and audit reviews

8. Successful M&A Disciplines
Technology
Should more often than not be a deal killer
Conduct a tough assessment:
Age of systems
Mainframe vs. Server
ASP / In-house licensed software / Outsource
Past IT Commitment: consistent investment?
Regulatory and Compliance technology components

9. Successful M&A Disciplines
Post-merger Integration Planning
Integration team representing all key functions
Move rapidly to change processes
Make leadership decisions as quickly as possible
Eliminate as much fear and uncertainty as possible

10. Successful M&A Disciplines
Remember – strategy first!
M&A is only one means of achieving growth
Develop strong disciplines
Targets
Objective hurdles
Review process – with the ability to walk away
Assess management, operations and technology too
Execute the implementation plan