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In this episode summary of the Investor Report Podcast, host Aleksandra Shushkevich sits down with Fortium Partner, Marty Howard, a veteran in mergers and acquisitions, to discuss the strategic considerations and challenges in the M&A landscape. With a focus on integration processes and operational perspectives, Marty shares his extensive experience to shed light on successful practices and common pitfalls. This insightful conversation provides valuable advice for businesses considering mergers or acquisitions, emphasizing the importance of thorough preparation and strategic alignment.
*The following is an edited synopsis of the full video interview, which can be viewed HERE
Aleksandra Shushkevich: Welcome to the Investor Report Podcast, everyone. I’m your host, Aleksandra Shushkevich. Today, we’re diving into the world of mergers and acquisitions from an operational perspective. Joining us is Marty Howard, a seasoned expert in the field. Marty, could you introduce yourself and give us a brief overview of your extensive experience?
Marty Howard: Thanks for having me, Aleksandra. I've spent about 15 years advising on M&A at Big Four and other major consulting firms. Additionally, for over 20 years I held C-suite positions, mostly as a Chief Information Officer or Chief Operating Officer. In those organizations I had hands-on responsibility across the M&A lifecycle, from diligence through integration.
Aleksandra Shushkevich: That’s impressive, Marty! Let's jump right in. How crucial is the integration process when considering a merger or acquisition?
Marty Howard: It's fundamental. The complexity of the integration can determine whether a deal should go ahead. There’s a common mistake in our field where firms engage in mergers because it's a trend—this 'urge to merge' seldom yields good outcomes. In brief, the “Pros” often get more attention than the “Cons.” Success is more likely when acquiring companies in the same sector, minimizing surprises.
Aleksandra Shushkevich: What should companies consider if they want to enter the M&A space?
Marty Howard: The first question should always be: Why are we doing this? Is it for growth, to increase market share, or to add value for shareholders? The strategies vary, but the simplest and usually most successful approach involves buying companies within the same sector. More complex scenarios include carving out parts of a company or entering new markets, which require careful consideration and robust due diligence.
“The first question should always be: Why are we doing this? Is it for growth, to increase market share, or to add value for shareholders?”
Aleksandra Shushkevich: And how should companies approach due diligence?
Marty Howard: Due diligence is iterative and scalable. It starts with high-level assessments to decide whether to proceed. This initial step shouldn't be resource-intensive, rather the focus should be on “gating” factors. As you delve deeper, areas like financial audits and vendor and customer reviews become crucial. It's essential to assess the risks and understand the operational, regulatory, and market dynamics of the target company.
Aleksandra Shushkevich: Could you share a success story from your career related to M&A?
Marty Howard: Certainly! I was part of a team that turned around a home health company. Within two years, we significantly improved both financial performance and clinical outcomes. Our stock price tripled, and our patient care ratings soared, making it a textbook example of a successful merger where we enhanced value while improving service quality.
Aleksandra Shushkevich: That’s truly inspiring, Marty. Any final thoughts for our listeners considering M&A?
Marty Howard: Always focus on the strategic reasons behind a merger or acquisition. Ensure your organization can handle the complexity of integration. Remember, the success of a merger often boils down to effective execution and aligning the acquisition with the company’s long-term goals. Integration is complex, synergies are hard to project and achieve, and research indicates about 70% of mergers fall short of objectives/
Aleksandra Shushkevich: Thank you, Marty, for sharing your invaluable insights today. To our listeners, we hope this episode helps you understand the intricate world of mergers and acquisitions better. Join us next time on the Investor Report Podcast. Goodbye for now!
To read Martin Howard’s full bio, click HERE. Martin is a faculty member of the Institute of Mergers, Acquisitions, and Alliances and focuses on interim, fractional, virtual CIO technology leadership for Fortium Partners clients.
