In an economic downturn, one thing is for sure. That you can bet those companies on top of the market -- and probably a number of organizations which are not -- will turn to acquisitions in hopes of pumping up the top and bottom lines. CEOs and CFOs like doing deals in an environment of depressed valuations and markets for a number of reasons. For one, larger deals are less likely to draw the same level of anti-trust scrutiny than in a rising market (this is especially true in sectors which are most in trouble like banking, retailing, manufacturing and automotive). But perhaps most important, during a business downturn, companies like to do deals because they see the opportunity as a chance to go bargain hunting, acquiring organizations with multiples that might not have been accretive in a rising market environment but have become so during the downswing. In addition, sometimes we see marriages made out of desperation in a tough economic climate. As an analogy, just think about a singles bar at 1:00 AM on the last night before a long-cold winter when all the watering spots will be closed.
In a time of hightened M&A activity, procurement’s role will no doubt increase given the importance of identifying and implementing rapid bottom-line cost synergies between organizations. But how can procurement organizations maximize their effectivness in this environment -- and how can they best justify asking for continued investment in people, processes and technology in a time of general cost cutting? During a webinar that I’ll be co-hosting on the subject with JV Kelly Group’s Jim Kelly on Thursday, October 30th from 1:00 - 2:00 PM EDT, we’ll explore how procurement organizations can take a leadership role in all stages of M&A activity in the context of the economic downturn.
From deal sourcing and deal analysis through to cost reduction realization, capturing both low and high hanging fruit savings, Jim and I will describe in practical terms how procurement and supply chain organizations can earn themselves a seat at the deal table. We’ll cover a range of topics -- from technology enablers to organizational process as well as the tricks of the M&A procurement trade. I know JVKG usually only reserves a certain number of spots for their webinars so if you’re interested, I’d encourage you to sign up as soon as possible. You can click here to register.
- Jason Busch