Over the last four years, McKinsey’s Corporate Finance practice has provided objective and independent support for clients on nearly 2,500 transactions.
Transactions have become increasingly important to our clients, who face changing regulatory environments, globalization, the blurring of industry boundaries, and cost pressures. Managing the complexity of transactions can be challenging for even the most experienced corporate leaders. McKinsey plays a critical role supporting all phases of transactions—before, during, and after—to ensure deals are consistent with corporate strategy and achieve maximum value. We work closely with clients to build their capabilities to evaluate and manage transactions.
What we do
Our consultants combine their extensive transactional expertise with a deep understanding of specific industry sectors to support clients on four types of transactions:
Mergers and acquisitions
In collaboration with our colleagues from the Strategy practice, we help clients ensure their M&A strategy aligns with their broader corporate strategy. We identify and assess targets based on a client’s strategic objectives, potential synergies, organizational and cultural fit, and the feasibility of a deal. Through our support of due diligence, we help companies understand the potential for value creation and what drives it. To help the transaction proceed smoothly, we support clients in structuring the deal, communicating its rationale to stakeholders and markets, and planning for integration. To provide a foundation for success after the deal closes, we help clients tailor the integration process, governance mechanisms, and organization to the transaction’s strategic objectives. All the while, we build our clients’ internal processes and capabilities to execute successful transaction programs.
Over the course of a project, we work closely with our merger management colleagues from the Organization Practice, who specialize in helping clients realize maximum deal value as quickly as possible.
Alliances and joint ventures
To support the formation of alliances and joint ventures, we analyze our clients’ needs and the situations that prompt them to look for a business partner, whether to enter a new market, start a new business, gain access to a technology or product, or improve industry relationships. We also assist them in identifying the best possible partners and assessing the potential for value creation. As plans for an alliance go forward, we help our clients develop the strategy and skills necessary to structure, negotiate, and implement the arrangement.
Divestitures
In recent years, many companies have taken a more critical look at the businesses they own and why they own them. We help clients critically assess their portfolio in order to better understand their core and non-core businesses. To support divestitures, we help clients to value the relevant business, identify possible deal structures, and support key issues affecting negotiations, such as the impact on vendors and the possible need for supply agreements with the acquirer.
Initial public offerings (IPOs)
We advise our clients on the full range of public offerings, from start-ups to privatizations and carve-outs. In preparation for an IPO, we help clients improve their business to ensure a public offering captures maximum value. We also assist clients in developing capital market strategies and in assessing IPO timing and structure. We support all aspects of preparing a company for the financial markets, including the key phases of the IPO: overall project management, business plan, valuation, financing strategy, listing documents, and analyst and roadshow presentations. After a listing, we help our clients achieve the stated targets and further build the capabilities needed for success in the capital markets.
Recent examples of our work
- We helped a major telecommunications player with cutting-edge technology, but little presence outside of Asia, develop and structure a joint venture through which it would roll out its offerings in Europe.
- We assisted two major conglomerates in executing a complex transaction in which two spun-off business units were merged and listed.
- We supported the entire deal process for a large high-tech merger. We helped the client design a value-capture program that realized $4 billion in cost synergies within a year.
Proprietary tools and solutions
We have developed a wide array of tools and solutions to help our clients extract maximum value from their transactions. Examples include the following:
- Excellence in M&A (EiMA) is an online diagnostic tool that benchmarks a client’s M&A capabilities and readiness against best practice, and identifies strengths and areas for improvement.
- Our target-screening framework supports teams in assessing a potential target’s size and health, strategic and cultural fit, and operational capabilities.
- A DCF valuation framework can be used for computing discounted cash flow
- McKinsey can offer a clean team, or a neutral team, working under strict confidentiality policies to support clients during various stages of M&A transactions.
- Our synergy initiative is a comprehensive synergy approach that includes a synergy handbook, synergy benchmarking tool, and specific industry guides.
For more information on proprietary tools and knowledge, please visit the Latest thinking page.