CCG Catalyst helps banks improve their chances of successful M&A through an integrated, battle-tested approach that links acquisition strategy, diligence and merger integration.
Our Approach
Acquisition Strategy
A successful bank merger or acquisition requires a well-defined strategy and experience. The question behind every deal should be: “How will this bank make my existing bank more valuable, and how will I bring value to the bank I am buying?” The answers are rooted in strategy–we work with you on your strategy. M&A as an extension of their bank’s growth strategy where the primary purpose of M&A is not to grow big fast, but to do what they do better.
Types of Mergers
- Acquires Approach – Most or all branches are retained, the acquirers products, operations, technology and staff retained and current technology & processes are baseline for merged bank. We call this a “Forced March to common systems and practices.”
- Merger of Equals – Whether it be 50/50 or some other combination, both banks agree that joining together is in the best interest of both of their banks. Both banks are attempting to increase value as a combined entity. The issues are many, but the top would be determining a future state together, joint leadership, and the merging of people and cultural.
- Holding Company – This approach is similar to an Acquires Approach, generally you maintain local board and management, separate regulatory charters, but similar products and services. Successful entities implement or have a “Shared Services” infrastructure.
Diligence
You need to know what you are buying and how you will make the business more valuable. Strategic due diligence is a forward-looking process that helps you understand how you can create value through an acquisition. The best acquirers investigate targets with a nose for what’s really important, identifying the key sources of ongoing value and sniffing out any “perfumed pigs” buffed up for sale.
Merger integration
To make a transaction pay off, you have to nail a short list of critical actions. But merging two banks also requires rigorous follow-through on a long list of integration tasks, large and small and let’s not forget regulatory. Doing both is hard. Part of the answer lies in a few, powerful guiding principles: tailor the integration to the transaction; and act with deliberate speed.
What We Do
The primary purpose of M&A is not to grow big fast, but for banks to do what they do better. We have worked on many M&A engagements across the country. We offer our clients an approach and bring our expertise to all elements of the transaction, including:
- Acquisition strategy: The question behind every M&A should be: “How will buying this bank make my existing bank more valuable, and how will I bring value to the bank I am buying?” We help companies build their M&A programs as a part of an overall strategic plan.
- Acquisition screening: We help clients develop an investment thesis that is aligned with strategy and growth opportunities. We work with you, your attorneys, brokers to enhance deal flow by screening targets based on criteria set in the M&A acquisition strategy process and develop a road map to approach targets.
- Due diligence: We collaborate seamlessly with our client due diligence teams to help your bank make better investment decisions. Experience matters: we are all from the industry and have conducted hundreds of due diligence.
- Merger integration: To make a deal pay off, you have to nail a short list of critical actions. But merging two banks requires rigorous follow-through on a long list of integration tasks. Doing both is hard. Drawing on our accumulated experience, we also bring time-tested process management skills to assure the to-do list gets completed.
Client Engagements
Merger synergies yield significant savings
Two community banks conducted a merger of equals to bring value to existing shareholders. To make the transaction attractive they needed to reduce the combined expense. CCG Catalyst designed and implemented an approach to consolidation that fit within the overall corporate vision. We helped the client develop ways to simplify core processes, closed facilities and reduced headcount. The result: exceeds synergy goal by 75%.
Overcomes merger missteps
To achieve the promise of its acquisition, we guided our client to avoid common post-integration missteps that would undermine the value involving different cultures and organizations. We worked with the leadership of both banks to develop a shared vision, prevent business disruptions and bridge differences, creating a fully integrated bank that delivered the desired results.
Managed merger risks with a plan for success
Acquiring a major regional bank was part of client’s strategy to grow its market dominance with an expanded branch network, product line, enhanced scale and stronger innovation abilities. But our client knew the risks. Too often strategically sound deals fail to live up to expectations because of three major stumbles: missed targets, loss of key people and poor performance in the core business. To succeed, the CEO and senior leadership needed an integration plan that clearly defined the payoffs—and risks—and how to overcome them. With our risk assessment, the creation of a Integration Project Management Office and detailed integration plan, our client was successful. The results result in record profits, retaining of key employees and stronger customer relationships.
