The new M&A situation: context, actors, practices... Has everything changed?

Speakers :

• Guillaume Paoli, Co-founder Aramis
• Rémi Aubert, Co-founder AB Tasty
• Raphael Vullierme, Co-founder Luko
• Damien Anzel, Managing Director Technology, Media and Telecoms, Société Générale

Issues

• According to consulting firms, between 50 and 80% of M&A transactions destroy value after 5 years. How to include M&A in the equity story and ensure that the transaction is win/win?
• Analyzing the evolution — or not — of the M&A framework

Key ideas

• M&A can be an opportunistic choice to accelerate the execution of a vision and seek out know-how
• For investors, the predictive nature of M & A transactions is perceived positively insofar as the operation consolidates the business without drastically increasing fixed costs, especially in a phase of market turmoil and concentration of players.

• We are in a context of uncertainty where risk factors suggest an environment that is not very favorable to the realization of M&A.
• Projects are not decreasing, but there is a drop in transaction volumes, a sign of a crisis of confidence and difficulties for sellers and buyers to align their projections for the future (knowing that some sectors are doing well)

Points of attention or don's

• Do not neglect the human aspects in order to find alignment in terms of functioning

Key learnings or do's

• Give investors a vision of the market, the players and the purpose of the operation with pessimistic, optimistic and median scenarios and precise specifications
• Involve investors in the analysis of targets
• Write a playbook and follow it
• Do not neglect the due diligence phase
• Take the time to successfully integrate by taking into account the culture of both companies and by relying on key resources (managers and project leaders), or even by using an external consultant who contributes to creating a culture of mutual trust
• Choose an integration model adapted to the business and the strategic vision

Guillaume Paoli: “The more M&A you do, the better you are in all phases of the project. If you look at the statistics, failures are hugely linked to company culture. Systematically, synergies are overestimated. This is the reason why we opted for a fairly light integration model. We share a lot of knowledge and tools but we let countries organize themselves to meet the needs of their customers. We prefer to do too little rather than too much.”

Raphael Vullierme: ” For us, the first M&A deal was opportunistic to accelerate the execution of our vision. For the second operation, based on the experience of this first one, which was quite a success, we opened up the field of potentials in order to accelerate certain things by doing M & A: the risk of organic execution in a business that was extremely far from our know-how was too high and we decided to do it through external growth. Both transactions were not carried out in a logic of growth but rather to seek out capacities to enshrine a vision and complete know-how”.

Damien Anzel: “For a lot of entrepreneurs, M&A has always been a driver of growth and the possibility of accessing new markets. There is no reason for that to change. Will current market conditions cause M&A to become rarer and more complex? Probably a bit. The drop in transaction volumes reflects a crisis of confidence or at least a crisis of visibility.”

Remi Aubert: “It's a double job: on the company you want to buy on the one hand and the investors on the other. On the business side, you have to go out in the field: meeting companies allows you to refine the vision on the themes. I then summoned the investors and sold them the project to give them the vision of the market, the vision of the players and the vision of what this can bring to the company, with pessimistic, median and optimistic scenarios.”

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