Understanding ‘how’ M&A blueprint: Putting it all together An M&A blueprint also prompts senior leaders to An M&A blueprint cannot and should not be come up with a plan for “how” they will use M&A developed based on “gut instinct” by a single to further their overarching corporate strategies. execu tive or defined post hoc to validate the theory Specifically, the M&A blueprint should delineate the behind an exciting deal. An executive or business- high-level business case and preliminary integration unit leader should lead its development but plans associated with each M&A theme. should be supported by corporate-strategy and corporate-development executives. The blue- The business case should explain how the acqui- print itself can take the form of a frequently updated ring company plans to add value to the target or and disseminated written report, or it can be a targets within a given M&A theme—for instance, the standing agenda item in every M&A and corporate- capital and operating expenditures needed (beyond strategy meeting. Regardless of format, it can the acquisition price) to integrate and scale the help decision makers assess critical factors relating asset or assets. It should also outline the operational to deal sourcing, due diligence, and integration changes and capabilities that will be required to planning before making any moves and taking steps integrate the new assets—for instance, the creation to identify targets. of a new business unit or a set of new business processes to manage an acquired digital platform. Looking back at the case of the cosmetics company, it becomes clear how an M&A blueprint could One large US healthcare company had committed have helped the organization prioritize a bunch of to a strategy of building scale in its services scattershot ideas into a comprehensive program- businesses through M&A. First, it consolidated matic M&A strategy. existing disparate service businesses under a new brand and organized them into three distinct With its market assessment, for instance, it might units: pharmacy-care services, diversified health have seen that the market for digital cosmetics is and wellness services, and data-analytics and tech- projected to grow five times faster than the market nology services. These became their three M&A for nondigital cosmetics. What’s more, market themes. Then, over a ten-year period, this program- data might have revealed that customers want and matic acquirer closed more than 60 deals, spending expect to buy cosmetics through digital channels, well over $20 billion, as it sought to fill out its and that there is no clear leader in the space. In its portfolio along these three themes. The organization self-assessment, the M&A team might also knew where it wanted to play and how. have seen a gap in the company’s product portfolio com pared with peers. And a look at boundary Of course, the business case should include a condi tions might have revealed the time and latitude preliminary integration plan for the acquired asset required to pay off initial acquisition investments, or assets that is consistent with the deal’s value- enabling the team to look beyond “base hit” deals creation thesis—for instance, all shared services with lower acquisition costs. will be absorbed by the acquirer, and the target company’s product portfolio will be cross-sold to The M&A blueprint would have led the cosmetics the acquirer’s existing customers. company to a different outcome—perhaps a laser focus on acquiring the set of assets and Through their use of the M&A blueprint, business capabilities needed to build a digital platform leaders can stay focused on those parts of the deal for selling cosmetics. that can create the most value—especially impor- tant when companies are pursuing multiple deals within the same M&A theme. What’s more, they can prepare functional leaders, suppliers, and others Spending time up front creating an M&A blueprint well in advance for the actions they may need to will pay off over the long term—particularly given take to integrate an asset or multiple assets. the volume of deals associated with a programmatic A blueprint for M&A success 63