This is an AArete Financial Services Insight

Identifying and realizing synergies is critical for the success of any Merger & Acquisition say AArete’s Matt Burelbach and Tyler Higgins, who also point out that nearly 89% of M&A-related reorganizations do not realize their full post-merger integration (PMI) potential value. They share how involving procurement can lead to financial, operational and technological synergies.

After a coronavirus-driven slowdown in activity, 2021 was a year of thriving M&A activity in the financial services space. There were 1,400+ acquisitions totaling more than $348 billion, with some notable M&A deals including Square’s purchase of buy now, pay later provider Afterpay; Visa’s purchase of open-banking platform Tink; and SoFi’s purchase of traditional bank Golden Pacific Bancorp.

Global M&A is projected to remain strong in 2022. As valuations reach historic highs, the pressure on deals to achieve meaningful value has never been greater. The financial sector — including private equity — played a pivotal role in the M&A activity story in the first few months of 2022. PitchBook reported that 501 financial services deals, worth an aggregate $102.8 billion, were closed in the first quarter.

While identifying and realizing synergies is critical for the success of any M&A deal, nearly 89% of M&A-related reorganizations do not realize their full post-merger integration (PMI) potential value. While each deal is unique, all organizations must prioritize financial, operational and technological synergies.

Click here to read about the four critical areas for Procurement’s involvement.
Originally published in Future of Sourcing, a SIG Publication.

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