I watched a useful overview of the M&A process, learning about the elements of the process and also the reasons that underpin why companies pursue growth in this way.

I learned that acquisitions offers companies pursue a growth strategy by purchasing companies that offers various opportunities to boost existing shareholder value. This can be achieved through diversification of risk (i.e. purchasing a company operating in a different market), improving a company previously operated by poor management (i.e. identifying operational efficiencies) and establishing synergies. 

I also learned that there is generally an M&A cycle that acquisitive companies follow to manage potential transactions. This includes identifying suitable targets, valuing the company (using various methods), negotiation, due diligence and closing the deal. 

I feel this was a short but helpful overview of M&A. I do feel some content of the course is quite obvious and would be generally understood by accountants and perhaps that a more detailed focus on why 70%-90% of M&As fail (as outlined at the end) would be very useful and interesting. 

I have been involved with due diligence in 2 instances, one as buyer (AECOM) and one as seller (Babcock) and from this video I learned that this activity is actually quite late on in the M&A cycle on the assumption that the original valuation inputs are broadly correct. It mentions that 70-90% of M&A 's have been shown to fail but doesn't include the reasons why this is - obviously the subject of a different video ! In the 2 instances I worked on both transactions went ahead and at least one was unsuccessful as external economic factors were not sufficiently considered.

Video helped me to understand the ways companies can grow and reasons for growth such as access to new markets and cushioning declines in other areas in business. Also access to capital markets useful for small companies merging with larger ones. Some great examples provided in the video on how companies have grown from small to very large and taking advantage of synergies.

I have quickly been reminded that M&A is a business strategy a company can pursue rather than grow organically from within due to many factors.I am encouraged that with the Management accounting tools I can pass surgical analysis into a growth strategy that involves M&A.There is no pre-programmed route for a successful M&A which creates a big opportunity for CGMA to utilise their skills and fill the void.