The probability of a successful acquisition and integration is estimated to be less than 50%. Yet downtown Las Vegas slot machines have an average 91.66% payout!
Over the past five years, acquisition deal types have undergone great change. In the past, most transactions (70%) were done for consolidation purposes, to achieve new economies of scale or to decrease cost. Today over half (54%) of all acquisitions are done for transformative reasons—- new markets, new capacity, new channels, or new products to move the business forward.
Transformation acquisitions have a higher level of complexity and risk. In fact, a recent study shows that transformation acquisitions only have 55% strategic success rate, a 50% financial success rate, and only a 47% operational success rate. The rate of failure remains high while the cost of transactions continues to climb.