Across 40,000 acquisitions studied over 40 years, 70% to 75% fail to deliver the value the buyer underwrote.
Among acquirers that track synergies from day one, 92% capture what they modeled.
Two core reasons for the disparity:
1. Cost synergies capture 70% to 85% of announced value. Revenue synergies capture 25% to 35%. A $30M synergy case split evenly between the two is realistically worth about $19M, and the $11M difference was already priced into what you paid.
2. And 47% of acquired employees leave inside the first year. The people who know why a contract was priced the way it was are gone by month 9, so the baseline has to be documented at close while they are still in their seat.
This week, pull the synergy schedule from your most recent close and put it next to the integration status report. For every line in the model, can you name the owner, the run-rate figure, and the month it starts, or do you only have a workstream marked green?
Full write-up in the weekly issue below.
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Acquirers That Track Synergies From Day 1 Reach 92% Success Rates
Mario Peshev
