With hukaroi, we help companies not only in the actual M&A process and due diligence. More than that, we help companies make the strategic decision to acquire (or not to acquire) a company and to avoid surprises post acquisition (e.g., because of perpendicular HR and payroll policies).
In the context of mergers and acquisitions (M&A, mergers & acquisitions), companies must exercise due diligence. Due diligence involves identifying legal and financial risks.
Rarely is this looked at from a strategic or organizational and/or HR point of view, e.g. what is the payroll cost going forward?
You can actually compare it pretty well to a love relationship. What if the success of a love relationship depended on only one party. The characteristics of the other party are irrelevant. That makes no sense at all...
Yet this is commonplace in M&A. The company potentially being acquired, the (rather irreverent) target, is turned inside out. But the acquirer is not subjected to any analysis.
This, however, is crucial in our opinion to match companies.
No due diligence examines these issues.
As a result, a harsh reality often presents itself after the deal is closed. Foreign companies that have taken over a Belgian company, for example, sometimes fall out of the sky when they learn that we have automatic wage indexing in Belgium and that the cost suddenly increases by 10%.
Due diligence is usually approached statically. All eyes are focused on the transaction as such at a specific time. However, one should focus on the reality after the day of the acquisition. Due diligence should be approached dynamically.Â
Why is that? Well, the triggers of the M&A process are law firms and financial players who seem stuck in that static approach. Tomorrow's challenges simply cannot be solved with yesterday's solutions.
Not surprisingly, between 70% and 90% of acquisitions fail. (source: HBR)
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