Ueli Dietiker was Swisscom CFO and Deputy CEO; today he still works 60% for Swisscom and as Board member at Fastweb, Belgacom International Carrier Services and Cinétrade. He serves also on the Board of Zuckermühle Rupperswil, Sanitas, Wincare, Swisslife and BLS and is member of the Foundation Board of Renaissance KMU Schweizerische Anlagestiftung.
Jürg Kurmann M&A: Which success factors in M&A have become more important for you over time with increasing experience?
It is much better to spend more money on a thorough Due Diligence than to rely on representations and warranties. If such are violated, it is very cumbersome to quantify the damage and to enforce compensation payments while then in most cases the original value of the acquisition and the acquisition rationale are no more intact and cannot be restored. Another very important success factor with acquisitions is to secure the commitment and the loyalty of the target’s management and also of key persons on lower echelons.
Jürg Kurmann M&A: Which was your most surprising incident in an M&A project or where you learnt the most?
At an acquisition with an earn-out component difficult discussions with the seller ensued post transaction regarding the earn-out. The seller feared that the integration might have a negative impact on the earn-out.
The integration, however, was very important in order to realize synergies. The issue was finally resolved by establishing an agreed-upon pro-forma calculation but I recommend, based on this experience, defining the target criteria for the earn-out to be as simple as possible. These criteria should be clearly and easily measurable also after the integration and regardless of the changes caused by the integration, reflecting the original risk sharing concept regardless of the changes caused by the integration.
About Jürg Kurmann Mergers & Acquisitions AG
We support owners and companies in Acquisitions and Divestitures, Restructurings and Corporate Governance topics. We provide individualized support for our clients with full personal commitment. Our approach is customer centric and tailor-made to the specific situation. Contact us here.