Mercer recognized as M&A Advisory leader
Transactions reshape organizations and, at times, deliver growth.
Dedicated mergers and acquisitions (M&A) advisors aid in delivering value by providing expertise to navigate complex deals and associated risks. Mercer is pleased to announce that it has received two awards in this highly competitive space. Presented by The Consulting Report and based on input including client recommendations, the awards are:
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Mercer was ranked fourth in The Top 50 Consulting Firms of 2024.
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Jeff Black, Partner in M&A Advisory Services at Mercer, ranked fourth in the Top 25 M&A Consultants and Leaders of 2024.
We spoke with Jeff to understand M&A trends and insights as well as what differentiates Mercer in this space.
What's trending in M&A deals right now?
JB: Business leaders and deal professionals are intensely focused on delivering promised deal value. Articulating the deal strategy is just the beginning; executing it is vital. One foundational execution component is having the right talent in place. This involves understanding the existing talent pool pre-close, developing a comprehensive strategy to retain key personnel and addressing post-close talent gaps. This is true as we work with our strategic and financial investor clients.
How do business leaders or deal professionals hinder deal value achievement?
JB: We see three value gaps:
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Lack of strategic focus on peopleDeal thesis formation typically focuses on operational factors like geographic footprint, sales structure and production output. However, critical human capital elements are frequently overlooked and, therefore, get addressed reactively post-close. A best practice is to define the leadership and workforce skill sets needed in the initial thesis. Then, test this starting in diligence. We have developed proprietary tools that provide such insights before signing, enabling leaders to understand any execution gaps realistically.
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Reactivity vs. proactivityMany clients react to people-related issues as they arise rather than proactively defining and assessing the most critical deal elements through the due diligence phase and closing. Anticipating people issues that impact deal value ensures a smoother transaction and delivery of promised results.
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Bridging strategy and executionSuccess hinges on having a team, whether composed internally and/or with external advisors, skilled at anticipating issues and bridging the gap between strategy and execution. These experts ensure that talent considerations are addressed from the outset and are seamlessly integrated into the deal's execution.
A few ways that we've helped clients to bridge these gaps include:
A global organization sought to acquire adjacent capabilities but had limited pre-close access to the target's workforce beyond the leadership team. The buyer wanted insight on whether it was worth spending US$15 million+ to retain the leadership team and if the broader workforce possessed the required skills to deliver the expected return.
Insights: Using proprietary tools, data and execution knowledge, Mercer uncovered that the leadership team was technically strong but lacked the skills to run the organization as a growth platform. Additionally, the presence of a thin but critical talent pipeline beyond the leadership team called for a deeper retention strategy.
A non-US organization acquiring a US-based business wanted to understand critical technical staff retention issues and the availability of talent in potential expansion cities.
Insights: Mercer's blend of proprietary tools and expertise uncovered a lack of succession planning and talent practices. This undercut the deal thesis' expectation of accelerating hiring (doubling headcount in the first 12 months post-close). Mercer provided insights into the most advantageous expansion location for acquiring critical talent quickly and advised adjusting compensation packages and culture to increase attractiveness.
Are there any new or different risks to watch?
JB: While long-standing threats to M&As, such as interest rates, antitrust scrutiny and geopolitical instability, remain relevant, a new and significant risk has emerged: the impact of artificial intelligence (AI). AI is transforming business processes, models, skill sets and performance, introducing complexities that need careful consideration during M&A activities. Understanding how AI will affect the target company and its integration is now a critical component of due diligence.
Any parting words of advice?
JB: Do not forget or underestimate the impact of the talent base on successfully creating your vision. If a deal is like paddling a canoe upstream, you can have the best canoe and oars in the world but progress is tough without the right people to row and rowing in the same direction. If you get the people part right, you’ll be streaming with an outboard motor instead of oars!
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