Deloitte: Debunking M&A myths

Deloitte LLP, which is over 100 years old, has built a wealth of knowledge. In fact, last year the firm posted $9.85 billion in revenues.

Well, Deloitte has put together an interesting series of small pieces – called Straight Talk guides. The goal is to help companies "rely less on guesses."

The guide that caught my attention was "M&A Lies, and Why They're Sometimes True." It's a quick read but has some valuable insights.

Keep in mind that – according to various studies – roughly half of M&A deals fail. That's certainly daunting.

But, this doesn't mean that companies should forgo deals. Rather, many companies have been particularly good at M&A, such as Cisco (NASDAQ: CSCO).

Some of the pieces of Deloitte's advice include:

• Don't get caught up in deal fever. After all, investment bankers can push hard (and they are incentivized to do so). Thus, if you detect some serious problems, slow things down – and perhaps even walk from the deal.
• Buying a company is fairly straight forward; integration, on the other hand, can be extremely complex. In other words, as you are putting together the deal, make sure you are also planning for the post-sale activities. Actually, one of the biggest issues is forgetting about customers (one study shows that customer neglect can result in a 50% drop-off in revenues after four years).
• You need to make sure you see good deals. To this end, it's important to cultivate relationships with various players, such as deal attorneys, CPAs and investment bankers.
• Taxes matter. Can you find ways to lower the tax burden?

So, to get the ebook, you can go to the Deloitte site.