M&A Synergy Assessment - Case Studies

ScottMadden energy consultants assisted an energy company evaluating the potential acquisition of another energy company.

An energy company was considering the acquisition of another energy company with significant merchant assets
A number of potential suitors also demonstrated interest in the property
Identifying cost reduction and revenue enhancement synergies were key elements of this pre-acquisition evaluation
The seller had an aggressive time frame for both data review and bid preparation�about three weeks
The organization lacked specific internal measurements to evaluate the sellers performance and synergy opportunities as a combined company

ScottMadden, energy consultants who understand the energy industry and the M&A process, facilitated groups of key functional experts within the client organization (potential "owners" of the resulting organization)
Established the initial concept for integrated operations
Reviewed seller data and reported findings relevant to legal, financial and operational due diligence investigation
Defined and analyzed peer plant operating performance against seller's generating facilities
Categorized, assessed and quantified potential operating and financial synergies, both positive and negative
Worked with internal and external financial experts to use synergy estimates in the valuation of seller

Energy consultants constructed a high-level management and operating approach for the combined entities
Quickly identified synergy opportunities that exceeded initial estimates
Helped clients go beyond their comfort zones in examining synergy opportunities
Identified non-quantified opportunities for strategic value creation
Highlighted due diligence issues
Identified other internal opportunities for cost reduction, notwithstanding a successful acquisition

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