Developing M&A strategy 15 M&A is back on the menu. EY’s May 2015 CFO Capital Confidence Barometer revealed that finance leaders see a strengthening pipeline and are planning Metro Pacific Investments Corporation (MPIC): M&A key for meaningful revenue growth from M&A. to strategy “M&A as a route to growth is firmly back on the boardroom agenda,” says Jose Ma. K. Lim, President and CEO of MPIC — a Philippine-based, Pip McCrostie, Global Vice Chair of Transaction Advisory Services (TAS), EY. publicly listed investment and management company — relies on his “There are two clear drivers of activity after half a decade of deal stagnation. CFO to provide insight on how to manage the M&A portfolio to support Disruptive forces are driving deal making at every level. The disruption the organization’s strategy. is triggered by sector convergence, technology and changing consumer “I view the relationship as a partnership and rely on my CFO to give preferences. In addition, divergent economic conditions are accelerating guidance on the financial cost and the risks in the portfolio as a whole,” cross-border M&A.” he explains. “We have a portfolio of companies and we operate by But this renewed taste for deals can still be soured by the perennial issue acquiring brownfield projects and investing in the necessary change — facing this critical activity: the tendency of acquisition benefits to disappoint. from technology to human resources — to turn the operations around as Companies need to focus their energies on a targeted M&A strategy, quickly as possible to create value.” concentrating on a carefully screened portfolio of assets. In addition, MPIC’s CFO, David Nicol, says, “The CEO and CFO have to be incredibly companies are changing their M&A strategies to adapt to the need to close to each other in terms of what they’re doing, and I think that’s digitize, incorporating non-traditional targets into their portfolios to enhance inevitable in every sort of investment and management conglomerate capability, which increases the complexity of ensuring value realization. like this. There isn’t even a cigarette-paper-sized difference between us Getting this approach right requires a strong CFO-CEO partnership. M&A in terms of what’s happening in the business.” decisions need to reflect the CEO’s strategic intent, while drawing on the CFO’s ability to analyze exactly where value will be created in a transaction and how deals will link to other growth drivers in the business. “ You have to act as an entrepreneur who takes accountability for the business success.” Roland Sackers, CFO and Managing Director at QIAGEN 15. CFO Capital Confidence Barometer, EY, May 2014. Partnering for performance Part 5: the CFO and the chief executive officer 27