2015 Global Corporate Development Study

Corporate development
today: driving strategy,
accelerating growth
2015 Global Corporate Development Study
Contents
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Õn]kl]hklghj]hYj]l`]ek]dn]k^gjo`Yll`]qYj]dac]dqlg]f[gmfl]jafl`]f]pl^]oq]Yjk&
Prepare to lead on strategy. As CDOs get more involved in both corporate and M&A
kljYl]_q$l`]qoaddf]]\lg`Yn]Ykljgf__jYkhg^fglgfdql`]kh][aÕ[kg^l`]\]YdeYjc]l
but also disruptive forces in play across all sectors.
2
Strengthen in-house skill set. 9o`gd]YjjYqg^f]oaf%`gmk]kcaddkoaddZ][ge]f][]kkYjq$
hYjla[mdYjdqd]_Yd$lYpYf\j]_mdYlgjqkcaddk]lk&
6
Take a holistic approach to M&A.9\ghlaf_Yhgjl^gdagYhhjgY[`lgE9$ZqlYcaf_
YZYdYf[]\dggcYll`]Zmkaf]kkYkYo`gd]$oaddZ]]kk]flaYd&
9
Take a (big) technology leap. With advanced analytics, CDOs have a unique opportunity to
explore and understand better the various factors that can affect a transaction.
10
Measure and reward performance appropriately. The successful CDO will be able to put
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;<>!akj]khgfkaZd]^gj$hjgna\af_gZb][lan]af[]flan]kYf\j]oYj\k&
12
Involvement in the Capital Agenda
• Our 2015 survey respondents are more involved in leading on the full range of capital allocation decisions than ever before.
• While the CDF’s primary focus is inherently on investing capital, it also plays a vital role in optimizing corporate capital deployment.
• Kaplq%Õn]h]j[]flg^j]khgf\]flkkYql`]qd]Y\Yf\h]j^gje ,+!gjd]Y\gfdq **!afghlaearaf_[YhalYdY[lanala]k$Ykljgf_
increase from our previous survey.
44%
6%
20%
11%
30%
7%
Raising: Do we have the right capital structure to
meet our strategic priorities?
Ra
is
Perform only
19%
Lead only
in
g
ing
st
ing
iz
rv
e
Not involved
5%
The
Capital
Agenda
es
54%
GfYn]jY_]$0)g^j]khgf\]flkd]Y\Yf\h]j^gjegj
lead only when investing capital. Most lead on deal
origination (91%), valuation (95%), due diligence
1,!Yf\f]_glaYlagf 1*!&
Inv
e
g
in
Pr
On average, 41% of respondents lead and perform or
lead only when preserving capital. Most lead on operational
restructuring (55%), with fewer respondents leading on cost
j]\m[lagf ,1!$j]ÕfYf[af_ +*!Yf\kmhhdq[`Yaf
eYfY_]e]fl *0!&
57%
Investing: What is the best way for our
company to grow, and is it aligned to our
core business?
On average, 50% of respondents lead and perform or lead
only when raising capital. Most lead on fundraising through
\an]klalmj]k .*!o`ad]^]o]jd]Y\gf^mf\jYakaf_l`jgm_`
equity (50%) or debt (44%). Respondents from the Americas
are less involved in raising capital.
Preserving: How can we improve the
performance of our assets?
24%
Op
ti m
>]o]jj]khgf\]flkd]Y\gfZgYj\'klYc]`gd\]jYhhjgnYd
./!$lYphdYffaf_ .-!Yf\afn]klgjj]dYlagfk ,+!&
Optimizing: What steps can we take to
maximize our portfolio’s performance?
On average, 65% of respondents lead and perform or
lead only when optimizing capital. Most lead on portfolio
rationalization/divestments (76%) and asset portfolio
review (69%).
Fewer respondents lead on measuring ROIC (60%) or on
[Yk`Ögo^gj][Yklaf_'ogjcaf_[YhalYdeYfY_]e]fl --!&
22%
Lead and perform
25%
10%
22%
43%
Introduction
Steve Krouskos
Deputy Global Vice Chair,
Transaction Advisory Services
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^mf[lagf ;<>!Yf\l`][gjhgjYl]\]n]dghe]flg^Õ[]j ;<G!&
9^l]jq]Yjkg^mf[]jlYaflqYf\[gfljY[lagfafl`]\]YdeYjc]lYf\l`]_dgZYd][gfgeq$[gehYfa]kYj]gf[]Y_YafY[lan]dq
k]]caf_lg_jgol`jgm_`e]j_]jkYf\Y[imakalagfk E9!&K]araf_ghhgjlmfala]ko`ad]j]eYafaf_^g[mk]\gfghlaearaf_[YhalYd
Yf\hgjl^gdagkak`a_`gfl`][gjhgjYl]Y_]f\Y&L`]k]kljYl]_a[_jgol`gZb][lan]kYj]ljYfkdYlaf_aflgYoa\]jj]eal^gj;<Gk
\m]lgjYha\eYjc]l[`Yf_]k$l`]Zdmjjaf_g^k][lgjdaf]kYf\\akjmhlan]^gj[]kÈkm[`Yk]f`Yf[]\_]ghgdala[Yd[gf[]jfkYf\
shareholder activism.
CDOs are playing an increasingly vital role in strategy at both the corporate and business-unit levels. That change is leading
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aehgjlYf[]g^l`]jgd]$alYdkgZjaf_kZjgY\]jj]khgfkaZadala]kYf\Yf]]\lg\]n]dghf]okcaddk&
Gn]jl`]hYklÕn]q]Yjk$l`];<>`Yk\]n]dgh]\egj]^gjeYdar]\hjg[]kk]klg]nYdmYl]\]Ydk&Alak[gf\m[laf_j]_mdYjhgjl^gdag
j]na]okg^l`]Zmkaf]kkYf\mf\]jklYf\kl`]_jgoaf_f]]\lgh]j^gje[mdlmjYdÕlYkk]kke]flkYk_dgZYdarYlagfZjgY\]fkl`]
pipeline of potential targets.
With a wider remit, the CDF now also needs a stronger grasp of such megatrends as digital transformation and big data
analytics, as well as understanding of the latest regulatory and tax implications of deals.
9fmeZ]jg^[gehYfa]kYj]j]khgf\af_lgl`]k][`Ydd]f_]koal`f]ol`afcaf_&L`][gf[]hlg^l`]É[`a]^_jgol`g^Õ[]jÊ`Yk
already been seized by early adopters. It could be the next evolutionary leap for corporate development, given the function’s
increasing convergence with strategy. Our latest study certainly suggests this as a possibility, while highlighting emerging
trends and providing insights on best practices being adopted today.
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\]eYf\k^gjl`];<G&F]o[`Ydd]f_]kj]imaj]f]oj]khgfk]k&Gmjklm\qÕf\k[gjhgjYl]\]n]dghe]flYlYljYfk^gjeYlagfYd
afÖ][lagfhgafl&L`]egklkm[[]kk^md;<Gkafl`]^mlmj]Yj]dac]dqlgZ]l`gk]j]^g[mkaf_$j]k`Yhaf_Yf\h]j`Yhk]n]f
reinventing themselves today for the needs of tomorrow.
Steve Krouskos
1
1.
The strategic imperative
Has your corporate development
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Global Corporate Development study indicates that the roles of the CDO and the CDF
oadddggcn]jq\a^^]j]flafl`]q]YjkY`]Y\Ykl`]qYj][`Ydd]f_]\oal`Yf]ojYf_]g^
responsibilities.
Digital transformation across all sectors, increasing shareholder and regulatory
scrutiny, and the heightened presence of global competitors are among the megatrends
j]k`Yhaf_E9afhjg^gmf\oYqk&;gjhgjYlagfkl`Yl`Yn]Z]_mflglYc]Y\nYflY_]
of new technologies and advanced analytics - and that are shoring up their strategic
[geh]l]f[a]k%Yj]k]]af_eYjc]l%\a^^]j]flaYlaf_j]kmdlkafl`]aj\]Ydgml[ge]k&
Strategic alignment
The CDF, led by the CDO, is now at the heart of the organization’s growth strategy. Our
survey clearly shows that developing a leading role in corporate strategy and strategic
planning have become critical priorities for corporate development. Among our survey
j]khgf\]flk$,,j]hgjll`Yll`]Za__]kl[`Yf_]afl`]jgd]g^l`];<Ggn]jl`]hYklÕn]
years is the greater alignment with the wider corporate strategic focus.
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j]khgf\]\lggmjkmjn]q&ÉL`]jgd]`YkZ][ge]egj]g^Y\jan]jafl`]E9hjg[]kk$fgl
bmklY[ggj\afYlaf_jgd]$ZmlYdkglYcaf_Yka_faÕ[YflhYjlafl`]hjg[]kk&Ê
Not surprisingly, alignment with strategy is a success factor that executives cite repeatedly.
With more than half of our respondents focused on growth, it is critical for CDFs to deliver
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executives and departments in their organization as the most important factor in enabling
them to do so.
ÉL`]jgd]g^l`];<Gak]ph][l]\lg]ngdn]lgaf[dm\]kljYl]_a[
planning on top of the existing business development, M&A, portfolio
eYfY_]e]flYf\ghlaearYlagf^mf[lagfk$ÊkYqka transaction
executive at an emerging market conglomerate.
2
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44%
18%
Strategic focus
16%
Volume of activity
Deal process
10%
6%
6%
Size of deals
Reporting lines
Other
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5%
20%
30%
12%
20%
46%
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5% 3%
1%
20%
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17%
N]jqkYlakÕ]\
Kge]o`YlkYlakÕ]\
35%
29%
22%
27%
49%
ImYdalqg^\]Ydk[gfka\]j]\
3%
22%
21%
26%
44%
9[`a]naf_kljYl]_a[gZb][lan]k
5%
22%
25%
45%
12%
8%
5%
F]mljYd
40%
38%
43%
Kge]o`YlmfkYlakÕ]\
FglkYlakÕ]\YlYdd
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LjYfkY[lagfafl]_jYlagf
L`]egklkYlakÕ]\j]khgf\]flk
• For each respondent, EY summed the scores for each
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O]mk]\l`akk[gj]lgk]hYjYl]l`]lghl`aj\g^j]khgf\]flkÈ
l`ak_jgmho][Yddl`]j]khgf\]flko`gYj]ÉegklkYlakÕ]\Ê
with transactions.
• In the balance of the report, we compare the answers for the
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Yf\`a_`da_`lka_faÕ[Yfl\a^^]j]f[]kYkal]ek[gjj]dYl]\oal`
transaction satisfaction.
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23%
Executive
performance
metrics
31%
Evaluation of
c]qe]lja[k
47%
Integrated
implementation
team
59%
62%
67%
;d]Yjdq\]Õf]\
strategy
performance
metrics and goals
Existence of
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strategy
Alignment of strategy
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departments
Note: up to three responses allowed
3
Convergence of M&A,
corporate strategy and
sharing of resources
Table 4: Please indicate the extent to which you are involved in
the following aspects of the transaction cycle
8%
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separate in most organizations, the connection and collaboration
between the two are becoming much stronger. The roles overlap in
various aspects of the transaction life cycle, particularly portfolio
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Yf\gZlYafaf_[geh]lalan]afl]dda_]f[] k]]lYZd]-!&9fmeZ]jg^
companies that responded to our survey are already more proactive
in terms of pipeline management and deal origination, dedicating
more internal resources and time than they did in the past to
a\]fla^ql`]ja_`llYj_]lk&>gj]pYehd]$l`]qYj]eYcaf_Z]ll]j
connections with their business units and leveraging advanced
technical methodologies. They now evaluate potential acquisitions
much earlier, long before the actual transaction.
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\]n]dghe]fl^mf[lagf$l`]qYj]YZd]lg\jYogfYka_faÕ[Yfl
number of resources, with large strategy teams giving the ability to
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kYqk$ÉOal`Y\]n]dghe]fllgoYj\Yegj]Y[lan]kljYl]_q
department, the CDO is now able to have a more active and
j]d]nYfl[gmfl]jhYjlafkljYl]_a[\ak[mkkagfk&Ê
Corporate
strategy
27%
17%
CSOs,
others
5%
25%
70%
1% 12% 9%
Transaction
strategy
78%
CDOs
CSOs,
others
1% 7%
2% 7%
Transaction
opportunity
32%
60%
18%
73%
CDOs
CSOs,
others
5%
38%
58%
3% 17%
Transaction
execution
80%
CDOs
CSOs,
others
4% 4%
Transaction
negotiation/
close
48%
CDOs
33%
60%
2% 5% 12%
82%
CDOs
CSOs,
others
4% 5%
26%
17%
10%
66%
23%
50%
CDOs
Transaction
effectiveness CSOs,
others
Table 5: Please indicate where you believe you play a leading
role in corporate strategy
Not involved
Ensuring M&A decisions are
grounded in portfolio reviews
Yf\kgmf\ÕfYf[aYd\YlY
77%
55%
Aligning M&A and/or
divestment strategy with
capital allocation decisions
23%
Perform only
63%
Lead only
Lead and perform
Note: percentages may not add to 100 due to rounding
74%
57%
Analysis of strategic
alternatives and portfolio
optimization
68%
74%
Innovation/expansion into
new geographic markets
52%
58%
Prioritizing markets investment
51%
58%
51%
51%
Competitive intelligence
46%
<]Õfaf_kljYl]_a[hjagjala]k$
including organic growth
70%
CDOs
CSOs, others
Note: respondents who indicated that they held leadership position on corporate
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4
6% 9%
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each other, so there is more often healthy
competition to generate bright ideas rather than
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a transaction executive at a European consumer
products company.
2015 Global Corporate Development Study
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Focus of corporate development
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2004-2008
2009-2012
2013-2014
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• Focus on deal strategy and
execution
• Broader strategic focus
important
• Greater balance between
acquisitions and divestments
• 9[`a]naf_kljYl]_a[
gZb][lan]k
• Acquisitions dominate
thinking
• Divestments on agenda
• Increase in partnership deals
• Defensive mergers and
balance sheet deleveraging
• Strategic buyers re-emerging
• Greater creativity in
doing deals
• Increased awareness of
ÕfYf[af_Yf\ZYdYf[]k`]]l
constraints
• Jgd]af\]Õfaf__jgol`
kljYl]_q
• Private equity strong
competitor for deals
• Domestic regulatory
frameworks and favorable
environments
• Geographic expansion —
emerging markets a strategic
imperative
• Global regulatory
convergence and tightening
regulation
• Rethinking geographic
footprint as portfolios are
reassessed
• Greater awareness of
ÕfYf[af_
After years of focusing internally on managing costs and
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many companies are starting to focus actively on M&A as a route
to future growth. Executives who responded to our 2015 Global
Corporate Development Study named their top transaction
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business, achieving economies of scale and acquiring a customer
ZYk]&9egf_l`]ajc]qgZb][lan]k^gjl`]f]pl)*egfl`kYj]
Y_j]Yldqaf[j]Yk]\^g[mkgf]fl]jaf_f]o_]g_jYh`a[eYjc]lk
Yf\\]n]dghaf_f]ohjg\m[lkÈhdY[af__jgol`Yll`]^jgflYf\
center of their strategy.
In fact, a growth strategy is now so important that the prospect
of strategy and corporate development becoming a single unit,
with a CGO or CPO at the head of it, is a distinct possibility. A
few leading-edge companies have already appointed a CGO, and
other businesses are considering such a position.
• Greater alignment with the
treasury function and the
lending community
• Greater uncertainty and
caution around dealmaking
• More involvement in
integration
• Increased focus on
performance evaluation
• Af[j]Yk]\d]Y\af_jgd]af
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• Mk]g^Za_\YlY'YfYdqla[k
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M&A
CDO
Transaction
strategy
Capital allocation
Aligning M&A
strategy with
corporate strategy
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Portfolio
management
Acquisitive
growth
Growth strategy
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transaction executive at a US manufacturing
company.
5
2.
New demands require new skills
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The emphasis on strategy and the convergence of roles means that the CDO of the future
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l`];<>$egklg^l`]gl`]j[geh]l]f[a]kl`Ylgmjj]khgf\]flkogmd\dac]lg`Yn]afl`]
;<>Yj]j]dYl]\lgjakceYfY_]e]fl$d]_Yd$j]_mdYlgjqYf\lYpkcaddk&L`]hj]k]f[]g^l`]k]
kcaddk[gjj]dYl]kkljgf_dqoal``a_`]j\]YdkYlak^Y[lagf&
J]khgf\]flko`gYj]egj]kYlakÕ]\oal`l`]ajljYfkY[lagfk Yk\]k[jaZ]\aflYZd]*!Yj]
egj]dac]dql`Yfgl`]jk ..nk&,,!lg`Yn]d]_Ydkcaddk]lkYnYadYZd]afl`];<>&L`]qYj]
Ydkgegj]dac]dqlg`Yn]j]_mdYlgjqkcaddk .+nk&*/!Yf\lYpkcaddk ,,nk&**!afl`]
;<>&Gf]kcaddafj]dYlan]dqk`gjlkmhhdqakZa_\YlYYfYdqla[k2bmkl*)g^l`];<>kkmjn]q]\
have this competency, an area that they will need to address as big data increases in
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Doing the right deal: strategic issues top
the agenda
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respondents to our study. Strategy and commercial assessment are at the heart of all
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and a formal M&A process that includes detailed pre-transaction analysis, analyzing targets
gfl`]ZYkakg^Y[gee]j[aYdYko]ddYkÕfYf[aYdYkk]kke]fl&
9l`gjgm_`[gee]j[aYdYkk]kke]flafngdn]kmf\]jklYf\af_l`]eYjc]l$l`][geh]lalagf
Yf\l`]lYj_]lÌkZmkaf]kkeg\]d&L`]Ykk]kke]flYdkglYc]kaflgY[[gmfll`]lYj_]lÌk
products and services, synergies and potential to create value for the acquirer. To spot
Yf\eYc]l`]ja_`l\]Ydaflg\YqÌk[gehd]peYjc]lhdY[]$l`];<>oaddf]]\lgZ]YZd]lg
use advanced analytics of big data, mining vast amounts of structured and unstructured
information and be able to turn them into a commercial advantage.
ÉO]d]n]jY_]\YlYYfYdqla[klgY[`a]n]YZ]ll]jmf\]jklYf\af_
g^[geh]lalan]hgkalagfaf_$o`gÌkoaffaf_$o`gÌkdgkaf_$ÊkYqk a
transaction executive at a US company in the
water industry.
6
Table 7: Please indicate the resident skill sets in the CDF
Table 8: If you were able to add another skill set to your
^mf[lagf$o`Ylogmd\alZ]7
Strategic planning
88%
Finance
83%
Accounting
65%
Legal
52%
Business unit/operations
46%
Corporate governance
42%
Regulatory
40%
Risk management
36%
Tax
29%
Treasury
25%
Big data/analytics
21%
Investor relations
21%
Sales and marketing
19%
Information technology
11%
Human resources
10%
4%
Real estate
Note: multiple responses allowed
Table 10: Use of analytics in the transaction life cycle
Table 9: Causes for transactions to fail
54%
52%
68%
%
66
73%
72%
71%
%
quite or most
important
60
5
%
54% 8%
%
regular or
extensive use
83%
Deal management process
Corporate development process
Integration process
Strategic process
Commercial assessment process
EfÔciency of due diligence process
Transaction integration
Quality of deals considered
Achieving strategic objectives
Valuation: divestitures
Valuation: acquisitions
Note: multiple responses allowed
7
Operational assessment,
cultural competencies
Gh]jYlagfYdYkk]kke]fl Zmkaf]kkhdYf$l][`fgdg_q$kmhhdq[`Yaf$
`meYfj]kgmj[]k!akYfgl`]jYj]Yafo`a[`[gjhgjYl]\]n]dghe]fl
is becoming more deeply involved. Our respondents indicate having
used external advisors or other business units to obtain services
such as operational diligence, modeling or business planning and
commercial diligence. This indicates the need to develop greater
mf\]jklYf\af_YZgmlo`]flgd]n]jY_]kcaddk^jgegl`]jZmkaf]kk
units or to co-opt operational specialists into the CDF.
9fgl`]jf]okcaddakYkk]kkaf_[mdlmjYd[geh]l]f[a]k&9_dgZYd
hdYqaf_Õ]d\`YkZjgm_`lhgl]flaYdlYj_]lk^jgeYddgn]jl`]ogjd\
aflgl`]\]YdkhY[]$j]kmdlaf_afakkm]kg^[mdlmjYdÕlYf\j]imajaf_
E9kljYl]_aklklgd]Yjf\a^^]j]flklqd]kg^\]YdeYcaf_Yf\
klYc]`gd\]jeYfY_]e]fl&
Gmjj]kmdlkk`goYka_faÕ[Yflaf[j]Yk]afl`]fmeZ]jg^
j]khgf\]flkl`YlhdYflg]fl]jf]o_]g_jYh`a[eYjc]lkafl`]
f]pl)*egfl`kÈ.(mh^jge,+afl`]dYkl)*egfl`kÈ
and this will present its share of challenges. Furthermore, deal
kljm[lmj]kafeYfqeYjc]lkYj]`a_`dq[gehd]p$g^l]fafngdnaf_
bgafln]flmj]k$hYjlf]jk`ahk$YddaYf[]kYf\YjjYf_]e]flkgl`]jl`Yf
straightforward mergers and acquisitions.
Table 11: Top 3 areas where the CDF has used services from
other business units (BUs) on transactions over the last
12 months
1
Operational
diligence
++
2
Eg\]daf_'
business
planning
+(
+
Commercial
diligence
*/
Note: multiple responses allowed
Table 12: Business objectives and rationale for transactions
Entering new
geographic markets
60%
43%
56%
60%
Strengthening the
core business
Acquiring new technology
43%
48%
53%
Acquiring customer base
45%
Achieving economies
of scale
ÉL`][gehd]palqg^l`]ljYfkY[lagfhjg[]kk
`Ykaf[j]Yk]\oal`l`]af[dmkagfg^[mdlmjYdÕl
assessments and increased focus on seller and
c]qklYc]`gd\]jkafl`]lYj_]lZmkaf]kk$ÊkYqka
transaction executive at a European consumer
products company.
New product development
8
45%
34%
42%
43%
Portfolio optimization
Speed to market
29%
Next 12 months
Note: multiple responses allowed
53%
38%
Last 12 months
58%
2015 Global Corporate Development Study
Growing involvement in
portfolio management
9fgl`]jeYbgjkljYl]_a[[`Ydd]f_]l`Yl;<Gkoadd^Y[]afl`]^mlmj]
oaddZ]l`]lYkcg^j]ZYdYf[af_Y[imakalagfkoal`\an]kle]flkafY
role and culture that has typically focused more on acquisitions.
Gmjj]khgf\]flkkh]f\jgm_`dq/(g^l`]ajlae]gfZmq%ka\]
transactions, and are preparing to spend more time on acquisitions
that will fundamentally change their business. They expect the
average percentage of their time spent on such transformational
Y[imakalagfklgaf[j]Yk]afl`]f]pllogq]Yjk$lg*-&)^jge).&/
[mjj]fldqYf\bmkl)*&-Õn]q]YjkY_g&
However, our survey respondents say that in two years they expect
to spend even less time on divestments than they do now. But it is
advisable to not lose focus on divestments, because they create
value, are a strategic route to longer-term growth and should be
considered as part of regular reviews of the entire portfolio.
AfYZmkaf]kk]fnajgfe]fleYjc]\ZqjYha\l][`fgdg_a[Yd
advances, regulatory changes, increased shareholder scrutiny
and shifts in customer purchasing power and demand, strategic
portfolio reviews are the most important tool to optimize capital
Yf\j]kgmj[]Yddg[YlagfkYf\\]l]jeaf]o`Yl\][akagfklgeYc]
regarding growth, restructuring or potential divestment.
The CDO’s role is central to these decisions, and our study reveals
that respondents are increasingly more involved in leading on
capital allocation decisions than they were in 2010.
Table 13: What percentage of your time was spent on the
^gddgoaf_Y[lanala]kÔn]q]YjkY_gYf\fgo7O`Yl\gqgm
]ph][lallgZ]aflogq]Yjk7
Buy side:
39.3
Small to mid-size
acquisition
Acquisition of a
minority interest
35
46.5
19.5
18
5.7
12.5
16.7
Transformational
acquisition
25.1
Sell side:
14.6
12.9
9.9
Small to mid-size
divestment
IPO/spin-off
Transformational
divestment
3.9
4.8
3.9
3.3
3.8
3.2
% of time Õn] years ago average
Current % of time average
Expected % of time two years
from now average
ÉL`];<G`]Y\kkljYl]_qYf\[gjhgjYl]
development. Strategy is focused on portfolio
eYfY_]e]fl'Y\bY[]f[a]k&L`];<G`]dhk
determine capital allocation, and the business
mfalkogjcoal`afl`gk]hYjYe]l]jkÇZmkaf]kk
mfalkgofl`]kljYl]_q$ÊkYqka transaction
executive in the manufacturing industry.
9
Spotlight
Big data analytics can
be a big deal for M&A
J]khgf\]flko`gYj]egklkYlakÕ]\oal`ljYfkY[lagfkYj]em[`
egj]dac]dql`Yfgl`]jklgmk]YfYdqla[kj]_mdYjdqgj]pl]fkan]dq
oal`j]_Yj\lgl`]imYdalqg^l`]\]Ydk[gfka\]j]\ /+nk&-+!Yf\
l`]]^Õ[a]f[qg^l`]\m]\ada_]f[]hjg[]kk /-nk&,*!&;<Gkoadd
`Yn]lg\]l]jeaf]`golgeYc]l`]Z]klmk]g^l`]k]f]okcaddkYk
the technology and use of analytics matures.
:a_\YlYak[geegfdq\]Ôf]\afl]jekg^^gmjÈNËkÉÇngdme]$
variety, velocity and veracity. Data has exploded at an astonishing
jYl]afZgl`ngdme]Yf\n]dg[alq l`]kh]]\Ylo`a[`al[ge]k$Yk
o]ddYk`go^Yklalf]]\klgZ]YfYdqr]\!afl`]dYkl^]oq]Yjk&Alak
present in a huge variety of structured and unstructured forms, and
[Yfkge]lae]kdY[cn]jY[alqgjY[[mjY[q&
9fYdqla[kakl`]e]Yfk^gj]pljY[laf_nYdm]^jgel`ak\YlYÇ the
tool through which actionable insights are generated. In a study
j]d]Yk]\af*()+$Afl]jfYlagfYd<YlY;gjhgjYlagfhj]\a[l]\l`Yl
l`]Za_\YlYl][`fgdg_qYf\k]jna[]keYjc]logmd\_jgoYlY*/
[gehgmf\YffmYd_jgol`jYl]$j]Y[`af_MK+*&,ZaddagfZq*()/
ÈgjYZgmlkaplae]kl`]_jgol`jYl]g^l`]gn]jYddaf^gjeYlagfYf\
[geemfa[Ylagfl][`fgdg_qeYjc]l&
Big data has huge potential to transform the effectiveness
of CDOs and the teams they lead. So far, companies have
Z]]f[gf\m[laf_Zmkaf]kkYfYdqla[k^gjkh][aÕ[^mf[lagfk&9l
l`]nYdmYlagfklY_]$0+g^gmjj]khgf\]flkeYc]eg\]jYl]lg
extensive use of analytics, but by and large, they have not yet
d]n]jY_]\l`]^mddhgl]flaYdg^Za_\YlYYf\'gjYfYdqla[kafE9&
Ways in which big data analytics can boost deal effectiveness
include:
• Mkaf_hj]\a[lan]YfYdqla[kYf\^gj][Yklaf_lgÕ_mj]gmll`]jakck
and opportunities in a deal
• Drawing quantitative and qualitative insights from social media
analytics during due diligence on a target and its products
• Mf\]jklYf\af_c]qZmkaf]kk[q[d]kZq]ehdgqaf_YfYdqla[k
]&_&$ogjcaf_[YhalYd!
• =ehdgqaf_Y\][akagf%eYcaf_^jYe]ogjcZYk]\gf\YlYk[a]f[]
lgj]Y[`YfgZb][lan]na]og^YkljYl]_a[hgjl^gdag
• Aehjgnaf_l`]]^Õ[a]f[qg^l`]\an]klalmj]hjg[]kkYf\hj]hYjaf_
[Yjn]%gmlÕfYf[aYdaf^gjeYlagf
• Identifying potential synergies by utilizing larger data sets and
\]l]jeafaf_o`]l`]jl`]]ph][l]\kqf]j_a]kYj]dac]dqlgZ]
realized
:a_\YlYYfYdqla[k[Yf`Yn]Yka_faÔ[YflaehY[l
on business improvement and transactions. The
following are some examples of how analytics can help
companies in a transactional context:
Social media analytics
• While performing due diligence
on behalf of a company in the
Ymlgeglan]Y^l]jeYjc]l$=Qmk]\
kg[aYde]\aYYfYdqla[k KE9!lgYfYdqr]YdYj_]\YlYk]lg^YZgml
500,000 online posts to gain deeper insights into a target and reach
YfgZb][lan]na]ogfl`]lYj_]lhjg\m[lk&L`]lYj_]l[gehYfqYkk]jl]\
that its superior warranty policy and product quality had been the
driver of revenue growth historically. But SMA highlighted that relative
hja[af_oYkYem[`egj]ka_faÕ[Yfl\jan]j$oal`l`]\ada_]f[]hjgna\af_
a cost-reduction opportunity on warranty policy.
• During an engagement in the food and beverage industry, EY used
KE9lgYfYdqr]Y\YlYk]lg^YhhjgpaeYl]dq,(($(((gfdaf]Yf\
social media discussions to gain deeper insights on a target. SMA
`a_`da_`l]\l`Yll`]lYj_]lÌkhjg\m[llYkl]oYkka_faÕ[Yfldqaf^]jagj
to the competition and a deterrent to future growth. The diligence
implication was that the target had been underspending on product
\]n]dghe]flYf\j]^gjemdYlagf[gklk$hjgna\af_Yka_faÕ[Yfl
post-close revenue enhancement opportunity.
Cash management
• A telecom company had a large customer base but
fragmented visibility into its accounts receivable
9J!&=Qhjgna\]\\]lYad]\ljYfkY[lagfYd\YlY
analysis that allowed the company to institute a
cash culture program to ingrain AR metrics into
the company culture, compress payment terms,
accelerate initial customer contact for collections
and consolidate the number of collection paths. The company
]klYZdak`]\Ykljm[lmj]\YhhjgY[`lgeala_Yl]jakcYf\kYoYfglYZd]
[Yk`%Ögoaehjgn]e]fl&
• Using sophisticated analytics, a global pharmaceutical company was
YZd]lgdaZ]jYl][Yk`^jgeogjcaf_[YhalYdlghYq\gof\]Zll`Ylal
had incurred during an acquisition. There were clear opportunities for
improvement in order-to-cash, purchase-to-pay and inventory, and
analytics helped the company optimize these opportunities.
For more information about EY’s analytics services,
nakal]q&[ge'YfYdqla[kgj[gflY[l2
John E Burns
Partner, Transaction Advisory
Services, Americas
#)*)*//+..-/
bg`f&Zmjfk8]q&[ge
John Hopes
Partner, Transaction Advisory
Services, EMEIA
#,,*(/1-)/01)
b`gh]k8mc&]q&[ge
Stuart Bright
Partner, Transaction Advisory
K]jna[]k$9kaY%HY[aÕ[
#.)*0*1-.,0+
klmYjl&Zja_`l8Ym&]q&[ge
10
Spotlight
Regional variations
Americas
18%
47%
60%
74%
41%
have a separate
M&A committee
lead and perform on
corporate strategy
Yj]kYlakÕ]\oal`l`]]^Õ[a]f[q
of the due diligence process
use analytics for the valuation
of divestitures
say the CDO is accountable for
transaction integration
Lgh+ljYfkY[lagfgZb][lan]k
1. Strengthen the core business
2. =fl]jf]o_]g_jYh`a[eYjc]lk
+&Acquire customer base
Lgh+oYqk;<Gl]YekYj]e]Ykmj]\
1. Fit of deals with corporate strategy
2. ;gjhgjYl]h]j^gjeYf[]'klg[chja[]
+&Number of deals completed
Lgh+j]Ykgfk^gjljYfkY[lagf^Yadmj]
1. Integration process
2. Commercial assessment process
+&Strategic process
Europe, Middle East and Africa
45%
57%
81%
67%
40%
have a separate
M&A committee
lead and perform on
corporate strategy
Yj]kYlakÕ]\oal`l`]]^Õ[a]f[q
of the due diligence process
use analytics for the valuation
of divestitures
say the CDO is accountable for
transaction integration
9kaY%HY[aÔ[
20%
64%
80%
53%
89%
have a separate
M&A committee
lead and perform on
corporate strategy
Yj]kYlakÕ]\oal`l`]]^Õ[a]f[q
of the due diligence process
use analytics for the valuation of
divestitures
say the CDO is accountable for
transaction integration
Lgh+ljYfkY[lagfgZb][lan]k
1. =fl]jf]o_]g_jYh`a[eYjc]lk
2. Acquire new technology
+&Strengthen core business
Lgh+oYqk;<Gl]YekYj]e]Ykmj]\
1. Deal pipeline and opportunity analysis
2. Fit of deals with corporate strategy
+&ROI on completed transactions
Lgh+j]Ykgfk^gjljYfkY[lagf^Yadmj]
1. Strategic process
2. Commercial assessment process
+&Integration process
Lgh+ljYfkY[lagfgZb][lan]k
1. Achieve economies of scale
2. Acquire new technology
+&=fl]jf]o_]g_jYh`a[eYjc]lk
Lgh+oYqk;<Gl]YekYj]e]Ykmj]\
1. ;gjhgjYl]h]j^gjeYf[]'klg[chja[]
2. Realization of transaction synergies
+&ROI on completed transactions
Lgh+j]Ykgfk^gjljYfkY[lagf^Yadmj]
1. Corporate development process
2. Commercial assessment process
+&Deal management process
11
+&
Greater rigor drives reassessment
of CDF structures and rewards
What are the new ways to enable and measure
km[[]kk7
>g[mkgfjakceYfY_]e]flYf\
corporate governance
Companies are approaching all deals with increasing rigor and standardized deal
processes in the face of growing competition from private equity players and
greater focus on corporate governance by boards and shareholders. Among our
j]khgf\]flk$l`gk]o`gYj]egklkYlakÕ]\oal`\]YdkYj]egj]dac]dqlg^j]im]fldqmk]
Y^gjeYdar]\hjg[]kk^gjYkk]lhgjl^gdagj]na]o 0)nk&-1!$[gflafmgmkaehjgn]e]fl
0(nk&.*!$gh]jYlagfYdk]hYjYlagf //nk&.(!$Z]f[`eYjcaf_ /+nk&.)!Yf\
Za_\YlY'YfYdqla[k .,nk&,-!&
This increased rigor is also expanding the required relationships of the CDF across various
^mf[lagfk&9dl`gm_`l`]kljgf_]klj]dYlagfk`ahkYj]oal`l`]ÕfYf[]Yf\d]_Yd\]hYjle]flk$
those respondents with higher deal satisfaction have stronger relationships with the
[gjhgjYl]_gn]jfYf[]$j]_mdYlgjq$jakceYfY_]e]flYf\af^gjeYlagfl][`fgdg_q^mf[lagfk&
ÉO]ljqlg^gddgoYklYf\Yj\]p][mlagfhjg[]kk$Ykjakcakfgl
[gjj]dYl]\lg\]YdnYdm]$Ê]phdYafka transaction executive in the
transportation industry.
Setting up M&A committees
Notably, executives report a growing preference for separate M&A committees that advise
]p][mlan]kYf\ZgYj\e]eZ]jkgf\]Ydk&L`akakhYjla[mdYjdql`][Yk]af=E=9$o`]j],-
g^gmjj]khgf\]flk`Yn]Yk]hYjYl]E9[geeall]] [gehYj]\lg*1gn]jYddYf\bmkl
)0afl`]9e]ja[Yk!&
Our survey clearly demonstrates that the presence of an M&A committee correlates with
`a_`]j\]YdkYlak^Y[lagf2j]khgf\]flko`gYj]egj]kYlakÕ]\oal`l`]ajljYfkY[lagfkYj]
egj]l`Yfloa[]Ykdac]dqYkgl`]jj]khgf\]flk ,,nk&*)!lg`Yn]Yk]hYjYl]E9
committee. While M&A committees differ in their structure, what they all have in common is
giving M&A a strong voice in the boardroom.
There is no clear consensus on the ideal governance structure. At one global company,
YfE9'afn]kle]fl[geeall]]Y\nak]kl`]ZgYj\gfYddY[imakalagfhjg[]kk]k&9lYfgl`]j$
a multidisciplinary executive committee, along with senior board members, evaluates all
ljYfkY[lagfa\]YkYf\eYc]kYfafalaYd\][akagfgfo`a[`gf]klglYc]^gjoYj\&L`]E9
committee governs this process and, in the words of an executive at the company, aims to
Éhjgl][ll`]_jgmh$fgllghd]Yk]]n]jqgf]&Ê
ÉL`]egj]kljm[lmj]\hjg[]kk^gjdafcaf_mhl`]ljYfkY[lagfhjg[]kk
oal`kljYl]_qakeYafdqj]hj]k]fl]\Zql`]E9[gmf[ad$Ê]phdYafka
transaction executive at a European automotive company.
12
Table 14: When executing transactions, how often do you use a
^gjeYdar]\hjg[]kk^gjl`]^gddgoaf_7
Table 15: Please indicate the strength of the working
relationship between the CDF and the given function
Valuation
95%
Finance
88%
Due diligence
95%
Legal
86%
Board/stakeholder approvals
90%
Strategic planning
84%
Kqf]j_qa\]flaÕ[Ylagf'YfYdqkak
88%
Accounting
82%
Documentation of key transaction decisions
86%
Business unit/operations
82%
Transaction integration
86%
Tax
78%
Post-closing adjustments
86%
Treasury
75%
Transaction measurement
81%
Corporate governance
71%
Tax mitigation
78%
Regulatory
68%
Opportunity analysis
75%
Investor relations
63%
Continuous improvement/feedback
69%
Risk management
60%
Investor relations
68%
Sales and marketing
53%
Operational separation (divestments/carve-outs)
67%
Human resources
52%
Asset portfolio review
67%
Information technology
46%
Benchmarking
65%
Real estate
33%
Big data/analytics
52%
% strong or very strong
% often or always
LYZd]).2<g]kqgmjZgYj\`Yn]Yk]hYjYl]E9[geeall]]7
Table 17: Potential options for M&A committees
O`gakl`][`Yaj7
CDO
CFO
Yes
29%
>j]im]f[q7
Quarterly
Monthly
Each stage of M&A process (NDA,
fgf%Zaf\af_g^^]j$<<$ÕfYdg^^]j!
Kljm[lmj]7
No
71%
CDO, head of BU, country/area director,
research director
CFO, CDO, VP BD, division CEO
M&A, strategy
<]YdYhhjgnYdl`j]k`gd\7
Everything
Up to US$5m
Up to US$100m
13
Evolving performance
measures for an evolving role
H]j^gjeYf[]e]Ykmj]e]flak[`Ydd]f_af_ÈalakYfakkm]l`YlY
number of our respondents consider problematic. In our survey,
1-g^j]khgf\]flkj]hgjll`Yl[gjhgjYl]h]j^gjeYf[]akaehgjlYfl
or very important in determining individual compensation, and
0-kYql`YlY[`a]naf_kljYl]_a[gZb][lan]kakYfaehgjlYflgjn]jq
important measure affecting individual compensation. Although
alak\a^Õ[mdllgYhhdqimYflalYlan]e]lja[klg]n]jqYkh][lg^l`]
function, reliable measures are a component in determining the
effectiveness of both the CDO and the CDF.
J]khgf\]flko`gYj]egklkYlakÕ]\oal`[geh]fkYlagf$Z]f]Õlk
Yf\af[]flan]kYj]egj]dac]dqlg`Yn][geh]fkYlagfdafc]\lg
\]hYjle]flYdh]j^gjeYf[]&:mll`][`Ydd]f_]da]kaf\]Õfaf_
precisely what individual performance means: the measures our
respondents use run the gamut from cost, time and quality to the
km[[]kkg^hYklY[imakalagfklg$afgf][Yk]$Éo`Ylgl`]jh]ghd]af
l`]gj_YfarYlagfkYq&Ê
L]Yee]Ykmj]e]fl`Ykegj]kh][aÕ[\]Õfalagfk2l]YekYj]
measured most commonly on deal pipeline and opportunity analysis
,/!Yf\Õlg^\]Ydkoal`[gjhgjYl]kljYl]_q ,.!&J]khgf\]flk
o`gYj]egklkYlakÕ]\oal`[geh]fkYlagf$Z]f]ÕlkYf\af[]flan]k
Yj]egj]dac]dqlg`Yn]l`]ajl]Yeh]j^gjeYf[]e]Ykmj]\Zql`]
actual price received or paid versus the original plan.
Can ‘soft’ measures better
Ykk]kkh]j^gjeYf[]7
Kladd$l]Yee]Ykmj]e]fl`Ykalkk`Yj]g^\a^Õ[mdla]k$afgmj
j]khgf\]flkÌna]o&ÉAlakfgl]Ykqlg\]jan]h]j^gjeYf[]e]Ykmj]k
^gjl`][gjhgjYl]\]n]dghe]fll]Ye$ÊgZk]jn]kgf]]p][mlan]&
ÉL`]fmeZ]jg^\]Ydk\gf]Yf\\]Yd_]f]jYlagfYj]YddhgkkaZd]
e]Ykmj]k$Zml]Y[`[ge]koal`Y\nYflY_]kYf\\akY\nYflY_]k&Ê
Another executive says that in the previous year, the team had
É[gf\m[l]\gf]g^l`]dYj_]kl\]Ydk]n]jYf\_glfgZgfmkYk
l`]_jgmhh]j^gjeYf[]\a\fÌle]]ll`]j]imaj]e]flk&ÊGf]
[gehYfqj]hgjlkl`YlÉal[YfZ]n]jq\a^Õ[mdllgeYc][`Yf_]k
lg[geh]fkYlagfkqkl]ekÊafl`]af\mkljqafo`a[`algh]jYl]k&
9fgl`]jZ]da]n]kl`YlÉl`]Z]klkqkl]ek`gmd\Z]kmZb][lan]Èqgm
\gfÌloYflaf[]flan]klg\g\]Ydk^gjl`]kYc]g^Y[lanalq&Ê
Lg\]Ydoal`l`]\a^Õ[mdlqg^É`Yj\Êh]j^gjeYf[]e]Ykmj]k$Y
fmeZ]jg^[gehYfa]kYj]mladaraf_kg%[Ydd]\Ékg^lÊe]Ykmj]e]fl
through internal satisfaction questionnaires. These qualitatively
assess their use to the broader business and the smoothness of
the M&A process on both completed and failed deals. This is based
on the assumption that the corporate development team is an
Éafl]jfYdY\nakgjÊYf\k`gmd\Z]Ykk]kk]\Ykkm[`&L`akkmZb][lan]
assessment may be more useful in the case of acquisitions, as the
best outcome may be not to buy, whereas in divestments, the exit
decision has already been made and so deal completion would be a
more relevant measure.
14
Table 18: Please rate the importance of the following factors
with regard to direct impact on your individual compensation
Corporate performance
95%
Individual performance
82%
Department performance
76%
Discretionary
66%
% somewhat or very important
Table 19: Please rate the importance of the following measures
with regard to indirect impact on your individual compensation
Achieving strategic objectives
85%
Discretionary
65%
Continued deal performance
60%
Number of deals completed
59%
Effective integration
58%
Acquiring revenue
57%
Number of deals considered
47%
% somewhat or very important
Table 20: What are the top three ways teams (departments)
Yj][mjj]fldqe]Ykmj]\7
Deal pipeline and opportunity analysis
47%
Fit of deals with corporate strategy
46%
Return on investment of completed transactions
39%
Corporate performance/stock price
37%
Number of deals completed
34%
Realization of transaction synergies
32%
Actual price received/paid versus original plan
25%
Fgl]2mhlg+j]khgfk]kYddgo]\
LYZd]*)2HjgÔd]g^Y\]kajYZd]hY[cY_]ZYk]\gfe]Ykmj]k
[gjj]dYl]\lgkYlak^Y[lagfoal`[geh]fkYlagf$Z]f]ÔlkYf\
incentives
Key department measures
• ROI of completed transactions
Key measures used to
determine compensation
• Actual price vs. original plan
• Effective integration
Key compensation factors
• Discretionary
• Department performance
• Acquiring revenue
• Continued deal performance
• Discretionary
• Number of deals completed
• Number of deals considered
2015 Global Corporate Development Study
The most common
integration metrics
Transaction integration is a measure that affects both individual and
team compensation and correlates strongly with deal satisfaction.
Gmjkmjn]qk`gokl`Yl]p][mlan]ko`gYj]egj]kYlakÕ]\oal`
transactions tend to follow certain integration procedures. They are
egj]dac]dqlgaehd]e]flhjY[la[]kkm[`Yk_gYdk]llaf_$Zmkaf]kk%
unit accountability for integration results and executive-level
reviews of integration success.
9dl`gm_`l`]eYbgjalqg^j]khgf\]flkgn]jYdd`gd\l`]Zmkaf]kk
leader accountable for integration, respondents who report
`a_`]jkYlak^Y[lagfoal`\]YdkYj]egj]dac]dql`Yfgl`]jklgYkka_f
Y[[gmflYZadalqlgl`]afl]_jYlagfeYfY_]j /1nk&-.!Yf\l`]
;<G -.nk&,+!&
Table 22: Top 3 metrics for monitoring and reporting on the
integration efforts
1
Financial
hjgÕlYZadalq
0-
2
Value of synergies
delivered versus
plan
/*
+
Synergy delivery
against timetable
/)
Note: multiple responses allowed
LYZd]*+2O`gakY[[gmflYZd]^gjljYfkY[lagfafl]_jYlagf7
74%
Integration
manager
64%
48%
CEO
Business
unit leader
CDO
33%
16%
CFO
Note: multiple responses allowed
15
Looking ahead
9j]qgmhj]hYj]\7
Gmjkmjn]qk`gokl`Yll`]egklkYlakÕ]\[gjhgjYl]
development leaders today are forward-thinking and do things
differently from their peers. They are more likely than their
counterparts to take the lead on new market investments,
establish formal deal and portfolio review processes. They
will have a variety of risk management skills (including legal
Yf\lYp!YkhYjlg^l`]aj;<>Ìkkcaddk]lYf\j][]an]o`Yll`]q
consider a desirable compensation package.
But this is not enough. What is adequate or even leading-edge
lg\YqoaddfglZ]km^Õ[a]fllgkm[[]]\afl`]E9eYjc]lg^
tomorrow. Leading CDOs and CDFs will likely take a different
1. Prepare to lead on strategy.
CDOs have always been involved in strategy to some extent.
However, as they get more involved in both corporate and M&A
strategy, they will need to develop a strong grasp of not only the
kh][aÕ[kg^l`]\]YdeYjc]lZmlYdkghj]nYadaf__dgZYde]_Ylj]f\k
such as digital transformation and the many disruptive forces in
play today across all sectors. Plotting a growth course in line with
l`]dgf_%l]jegZb][lan]kg^l`]ajgj_YfarYlagfYf\l`]\qfYea[k
of their industry will be paramount.
3. Take a holistic approach to M&A.
Deal structures are becoming complex. They are no longer
a matter of straightforward M&A, particularly in emerging
eYjc]lk$o`]j]afeYfq[Yk]k\]YdkYj]kmZb][llgj]_mdYlgjq
j]imaj]e]flk$ljYfkY[lagfkoaddlYc]YnYja]lqg^^gjek&L`ak
af[dm\]khYjlf]jk`ahk$bgafln]flmj]k$YddaYf[]k$Ykk]lkoYhk
and other arrangements. Adopting a portfolio approach to M&A,
ZqlYcaf_YZYdYf[]\dggcYll`]Zmkaf]kkYkYo`gd]$oaddZ]
essential. Corporate development leaders will need to extend
the capabilities of their functions to do this.
5. Measure and reward performance
appropriately.
L`]eYbgjalqg^gmjj]khgf\]flkaf\a[Yl]l`Yll`]qYj]fgl^mddq
kYlakÕ]\oal`]al`]jaf\ana\mYdgjl]Yeh]j^gjeYf[]e]Ykmj]k$
hgaflaf_lgl`]kmZb][lanalqg^l`]k]e]lja[kYf\l`]\a^Õ[mdlq
of quantifying them. The successful CDO will be able to put
lg_]l`]je]Ykmj]kl`Yl[Yhlmj]l`]jYf_]g^lYkckl`Yll`]
CDF is responsible for - not only recognizing the successful
h]j^gjeYf[]g^l`gk]lYkck$Zmlhjgna\af_gZb][lan]af[]flan]k
and rewards.
16
path, managing new issues related to a broader strategic
scope. They will often be tasked to come up with fast and
innovative answers to questions they may never have been
asked to deal with in the past. The upside is almost unlimited
potential to succeed, both for the CDO personally and for the
organization; the downsides are uncertainty, risk and lack of
planning for the major shifts in the role. Based on our research,
we recommend that corporate development executives take
l`]^gddgoaf_Õn]kl]hklghj]hYj]l`]ek]dn]k^gjo`Yll`]q
are likely to encounter in the next few years.
*& Klj]f_l`]fl`];<>Ëkaf%`gmk]kcaddk]l&
As the CDF becomes more involved in decisions about portfolio
optimization and pipeline management, a whole array of new
af%`gmk]kcaddkoaddZ][ge]f][]kkYjq$hYjla[mdYjdqd]_Yd$lYp
Yf\j]_mdYlgjqkcaddk]lk&>gjeYfq[gehYfa]k$l`]k]eYqfgl
traditionally have been part of the CDF’s repertoire, but they will
become essential.
4. Take a (big) technology leap.
CDFs will need to show increased willingness to dive into
advanced technologies such as big data analytics. In a complex,
highly competitive deal environment, exhaustive research
Yf\\m]\ada_]f[][YfeYc]Yddl`]\a^^]j]f[]lgl`]km[[]kk
of a deal. With advanced analytics, corporate development
executives have a unique opportunity to explore and understand
better the various factors that can affect a transaction and to
eYc]\][akagfkY[[gj\af_dq&
Ultimately, M&A strategists, in the CDF and elsewhere, are
e]Ykmj]\gfl`]aj[gfljaZmlagflgl`][gehYfqÌk_jgol`&9k
one of our survey respondents told us:
ÉL`][gjhgjYl]\]n]dghe]fl^mf[lagfg^l`]
future will be inspired by fund management;
evaluation of investment performance
and investment opportunities will be very
aehgjlYfl&Ê
About the research
Gn]jl`]hYkl\][Y\]$=Q`Ykogjc]\ka\]Zqka\]oal`k]fagj
d]Y\]jkg^l`][gjhgjYl]\]n]dghe]fl^mf[lagf ;<>!Ykl`]ajjgd]
has evolved to meet the demands of a changing and challenging
business landscape.
The 2015 Global Corporate Development Study is a multi-phase
research initiative. The study targets the corporate development
g^Õ[]j ;<G!gjegklk]fagjh]jkgfoal`afl`]gj_YfarYlagf
oal`j]khgfkaZadalq^gjE9'ljYfkY[lagfkYf\l`][`a]^kljYl]_q
g^Õ[]j ;KG!gjegklk]fagjh]jkgfoal`afl`]gj_YfarYlagfoal`
j]khgfkaZadalq^gj[gjhgjYl]'gh]jYlaf_mfalkljYl]_q&
O]kmjn]q]\egj]l`Yf+((;<Gk$;KGkYf\gl`]j;%d]n]d
]p][mlan]kZ]lo]]fBmf]Yf\Fgn]eZ]j*(),&L`]eYbgjalqg^
j]khgf\]flkkh]f\Yld]Ykl.)g^l`]ajlae]gfljYfkY[lagfk&
J]khgf\]flk[Ye]^jge[gehYfa]kaf+1[gmflja]k3-,g^l`]
companies surveyed reported revenues of more than US$5 billion.
Nearly two dozen industry sectors were represented, and the top
Õn]af\mklja]ko]j][gfkme]jhjg\m[lk$af\mkljaYdhjg\m[lk$gadYf\
gas, technology, and power and utilities.
Our data collection methodology included online and telephone
surveys, face-to-face interviews, group sessions similar to focus
groups, and independent research.
Regional split
14%
9kaY%HY[aÔ[
39%
EMEA
47%
Americas
+
*
* * ) )
)+
),
,
,
)+
-
-,
.
++
)(
.
0
1
)(
Industry split
Revenue split
Retail and consumer products
Other
<US$1 billion
Industrial products
Health care
MK)ÇMK-Zaddagf
Oil and gas
Telecommunications
>US$5 billion
Technology
Government and defense
Power and utilities
Media
Life sciences
Real estate and construction
Automotive and transportation
Mining and metals
Financials
Asset management
Chemicals
Note: EMEA includes Europe, the Middle East and Africa.
17
EY | Assurance | Tax | Transactions | Advisory
Contacts
Global
Pip McCrostie
Steve Krouskos
Global Vice Chair
Transaction Advisory Services
hah&e[[jgkla]8mc&]q&[ge
#,,*(/10((-((
Deputy Global Vice Chair
Transaction Advisory Services
kl]n]&cjgmkcgk8mc&]q&[ge
#,,*(/10((+,.
Regional leaders
Americas
Richard M. Jeanneret
9kaY%HY[aÕ[
John Hope
Americas Leader
Transaction Advisory Services
ja[`Yj\&b]Yff]j]l8]q&[ge
#)*)*//+*1**
9kaY%HY[aÕ[D]Y\]j
Transaction Advisory Services
bg`f&`gh]8`c&]q&[ge
#0-**0,.111/
Europe, Middle East, India
Yf\9^ja[Y =E=A9!
Andrea Guerzoni
Japan
Kenneth G. Smith
EMEIA Leader
Transaction Advisory Services
Yf\j]Y&_m]jrgfa8al&]q&[ge
#+1(*0(..1/(/
Japan Leader
Transaction Advisory Services
c]ff]l`&keal`8bh&]q&[ge
#0)+,-0*.,((
About EY
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ogjcaf_ogjd\^gjgmjh]ghd]$^gjgmj[da]flkYf\^gjgmj[geemfala]k&
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9Zgml=QÌkLjYfkY[lagf9\nakgjqK]jna[]k
How you manage your capital agenda today will define your competitive
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nYdm]Zq`]dhaf_l`]eeYc]Z]ll]j$egj]%af^gje]\\][akagfkYZgml
kljYl]_a[YddqeYfY_af_[YhalYdYf\ljYfkY[lagfkaf^Ykl%[`Yf_af_eYjc]lk&
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