In M&A, CFOs shouldn’t only focus on financial due diligence and financing structures, but directly contribute to value creation, say EY consultants Juan Uro and Lukas Hoebarth in an article, published by the CFO Magazine.
I could not agree more: My CFO-background has proven to be a true asset in my post-merger integration projects. Understanding synergy targets (and target setting), dependencies and cost of implementation, interfaces, as well as planning and controlling are indispensable competencies when managing a post-merger integration. My experience tells this goes well beyond project management skills.
The CFO’s contributions in deal value creation are regarded especially important in:
- Articulating where and how synergies can be realized, in line with the deal thesis;
- Identifying the true cost to achieve synergies;
- Building synergy targets into multi-year strategic plans and budgets;
- Assigning specific owners to each synergy goal and including synergy attainment in their individual annual performance measures; and
- Driving management to define operational key performance indicators that measure synergies and serve as leading indicators.
To make a long story short: If such activities are delegated, they should not be delegated into Corporate Development or left to M&A’s exclusive attention. Rather, if handed over to someone else, it should be a person with the right background.