Human Capital and M&A
During mergers and acquisitions, boards rightly focus on the strategic, financial and governance aspects of a transaction in order to further the goal of maximizing shareholder value. However, they often neglect one of the greatest sources of value in many M&A transactions: the talent of the management team in the target company. In our experience, exercising due diligence about talent is as important as paying close attention to the balance sheet, cash flow and expected synergies of a deal.
By asking management a series of questions about human capital in a merger or acquisition, boards can contribute to a smoother transition to a single company, a better merging of cultures, the loss of fewer “A” players, and a stronger talent bench for the merged company—all of which should ultimately create more value from the deal.
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