Head of Deals Consulting, PwC United Kingdom
I’ve been working in the deals market for over 20 years, the last 16 of them at PwC. Before that I was CFO of a business which made a number of acquisitions, and I’ve also worked as investment director in Private Equity. Since I’ve been at PwC I’ve focused on transactions that involve complex global divestitures and integrations, so my expertise is in a certain type of deal, rather than one sector or market. The most high-profile deals I’ve worked on have been with Roche, GSK/Novartis, ThomsonReuters, Anglo American, Rio Tinto Alcan, and, most recently, Bain Capital.
My first big deal with Roche was the 2004 sale of their over-the-counter drugs business. That took 18 months of redesigning the operating model and separation planning, and involved both trade and PE buyers. The ThomsonReuters merger was more about reviewing the synergies that had been identified in the pre-deal work, to ensure they stood up to public and regulatory scrutiny, and could actually be delivered. That was followed by RioTinto’s $44bn purchase of Alcan in 2007. I worked on the synergy review done before the bid, and then the disposals of legacy Alcan businesses that were required after it. At the time, it was the biggest global divestiture plan ever done – there were eight businesses up for sale across multiple sectors and more than 26 countries, and I advised on seven of them. I worked on the recent asset swap between Novartis and GSK, again reviewing the expected synergies.
I’ve also worked on M&A options analysis – one in particular proved how much more value was hidden within the business.
We identified a 35% potential upside in the profits for a $2bn division of a Global Pharmaceutical business, which they had been considering selling. We then worked with them for two years to release that value, and they decided to keep the business at the end of it.
More recently I’ve been involved with a Global Consumer Goods business in its preparation for sale of a division operating in over 60 countries. We’ve been helping them prepare the division for sale, identify its full potential profitability, ensure it can be carved out efficiently, achieve the best price, and be well-positioned for success under its new ownership.
The real key to any disposal is ensuring the business concerned has the right business model, operating model and people to thrive on its own. So much of that is about inspiring the management team with the possibilities that will come with independence. The chance to create a bolder, simpler, nimbler and more creative standalone firm.
As a Deal Value Architect I apply the same skills for both buyers and sellers: advising on business models and operating models, identifying synergies, quantifying revenue growth and cost savings, and exploring how to make the business more profitable. In short, finding and delivering real value, not just through the transaction but afterwards. It’s become a cliché that the majority of large deals fail, but our research at PwC suggests it’s not the deals themselves that fail, it’s the fact that management don’t spend sufficient time on the Value Creation plan, get distracted with deal execution and the existing business suffers. That’s why good planning is so important: you need a robust, comprehensive design for deal success.