Maximising asset value for mergers and acquisitions

Merger and acquisition activity may be on the up but for many organisations now looking for a buyer, maximising value is a major challenge. And while cash rich companies are keen to expand where possible, no organisation wants to acquire a business that is likely to need unexpected investment in the current climate.

Yet with the majority of organisations still reliant upon spurious fixed asset data held in spreadsheets, achieving an accurate picture of the balance sheet and true profitability is proving a major challenge and a potential deal breaker.

Failure to put in place an accurate, up to date asset register could result in the company assets being significantly undervalued. It could also undermine the organisation’s ability to demonstrate strong cost control through asset reallocation and, with no asset maintenance history, a potential purchaser has no insight into asset health and the potential investment required, which could further reduce the price offered.

Non-organic business expansion may look strongly appealing in 2010 but with cost control under focus and a sustained reluctance to embark upon unscheduled capital expenditure, should any merger and acquisition activity really take place without a trusted, accurate audit trail of company assets?