“The Kind Of M&A To Do Right Now”
In the August 12, 2010 issue of Forbes.com, Booz & Company Partner Paul Leinwand and Senior Partner Cesare Mainardi (both North America) wrote that the future of mergers and acquisitions should center around a business’s distinctive capabilities—“a capabilities filter to guide a rejuvenated M&A strategy,” as they put it in a bylined piece. “We happen to be unashamed capability bigots,” they wrote. “That is, we believe that the deals most worth doing are the ones that will help you better do what you already do well.” As such, Leinwand and Mainardi urged leaders to slot M&A deals into one of four categories—deals that help strengthen a company’s distinctive capabilities; add products or services that are a close fit with its capabilities; help to expand internationally; and propel a company into some new area of business unrelated to the core. The authors cited a Booz & Company study of health-care M&A since 1995 that found deals completed to augment capabilities had 38 percent more winners than losers, as measured by the acquirers’ stock prices one year out.