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Rethinking the M&A process: Learning private equity’s secret to outperforming corporate strategic acquirers

John Gilligan (John Gilligan is Director of the Finance Lab at the Saïd Business School, University of Oxford (john.gilligan@sbs.ox.ac.uk) and co-author of Private Equity Demystified: An explanatory guide, (Fourth Edition, Oxford University Press, 2020). Tim Galpin is Senior Lecturer of Strategy and Innovation at Saïd Business School (timothy.galpin@sbs.ox.ac.uk) and author of Winning at the Acquisition Game: Tools, templates, and best practices across the M&A process, (Oxford University Press, 2020))
Timothy Galpin (John Gilligan is Director of the Finance Lab at the Saïd Business School, University of Oxford (john.gilligan@sbs.ox.ac.uk) and co-author of Private Equity Demystified: An explanatory guide, (Fourth Edition, Oxford University Press, 2020). Tim Galpin is Senior Lecturer of Strategy and Innovation at Saïd Business School (timothy.galpin@sbs.ox.ac.uk) and author of Winning at the Acquisition Game: Tools, templates, and best practices across the M&A process, (Oxford University Press, 2020))

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 29 March 2022

Issue publication date: 15 April 2022

433

Abstract

Purpose

Although M&A transactions often destroy shareholder value for corporate strategic buyers, PE firms, whose business model is predicated upon repeating M&A, have a better record of creating value for their investors.

Design/methodology/approach

The critical aspects that comprise the PE playbook are organized around the three main deal phases Pre-deal, Deal and Post-deal.

Findings

Research has found that 60 percent of surveyed strategic buyer executives indicated their companies do not have a comprehensive end-to-end M&A approach using a playbook.

Practical/implications

Ample evidence exists demonstrating that corporate strategic buyers experience significant difficulty in creating value from their transactions.

Originality/value

Though many view PE firms as value-destroyers, various peer-reviewed studies have found that PE-backed firms have a surprisingly favorable record.

Citation

Gilligan, J. and Galpin, T. (2022), "Rethinking the M&A process: Learning private equity’s secret to outperforming corporate strategic acquirers", Strategy & Leadership, Vol. 50 No. 3, pp. 21-28. https://doi.org/10.1108/SL-03-2022-0015

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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