During the first half of 2011, more than 4,100 merger and acquisition (M&A) transactions took place, according to a recent article on Open Forum. These transactions were valued at more than $620 billion. In the second quarter of the year alone, more than 2,000 M&As were successfully completed, with a transaction value exceeding $260 billion.
You don’t see only big companies participating in M&As, either. According to the article, “People are attracted to larger numbers and that’s why those deals get most of the press. But in reality, most M&A transactions happen among smaller companies. Ninety-three percent of the 2,000 transactions that took place during the second quarter were valued at less than $500 million.”
M&A activity is expected to remain strong throughout the rest of 2011. So, is your sourcing team prepared for the business changes and challenges associated with M&As?
The first step to preparing your team for a successful M&A transaction is implementing a spend analysis solution. Data visibility is a key ingredient in becoming a best-in-class procurement organization. Spend analysis can help your team gain insight into the newly consolidated spend categories, identify new opportunities for cost savings and supplier rationalization, and expedite M&A decisions.
Iasta recently sponsored a Webcast titled Using Spend Analysis to Smooth the M&A Path: 4 Steps to Consolidate Your Purchasing Power. One of the guest speakers was Seth Balsam from Ciena, a global leader in the optical networking industry. Ciena doubled in size overnight through its acquisition of Nortel Networks.
“With this acquisition came the pressure to identify savings and synergy opportunities as quickly as possible,” Balsam said.
To learn how Ciena successfully implemented spend analysis to enhance data insight, drive adoption of the new solution, and create credibility to leverage supplier negotiations, download the presentation slides from the Webcast Using Spend Analysis to Smooth the M&A Path: 4 Steps to Consolidate Your Purchasing Power.