Alliance M&A Survey Reported in San Jose Business Journal
February 3, 2012
A new survey of Bay Area CEOs shows that they are shifting their focus towards mergers and acquisitions.
More than half (56 percent) of the CEOs surveyed by the Alliance of Chief Executives Alliance of Chief Executives Latest from The Business Journals Signs point to more business for GNUCEOs band together to find someone to talk toBeyond 9 to 5 - Employees thrive on trust, respect and flexibility Follow this company said M&A was not important to their company's growth last decade.
But nearly 60 percent now say it is important (26.9 percent), very important (23.1 percent) or "of prime importance" (9.5 percent).
"Companies that were financially disciplined during the downturn are looking at acquiring less fortunate competitors as a means for growth," said Robert Sher, an Alliance director.
Most of the CEOs surveyed (55 percent) said they plan to make one or two acquisitions this decade, compared to 59 percent who made no acquisitions in the last decade.
Among those who did M&A, there was a cautionary note: While two-thirds said the deals increased their revenue, less than half (46 percent) said their combined profit grew.
"About half of our survey respondents acknowledged they didn’t do enough due diligence before closing a deal, while their No. 1 regret after the deal closed was not integrating the target company faster and more effectively," Sher said, who is a principal at CEO to CEO.
The report was based on surveys sent to 300 Alliance of Chief Executive members last month. More than half of those responding run closely held companies with less than $20 million in annual revenue.