Social Performance is the ‘Achilles heel’ of M&A. Pre-acquisition attention to technical, operational, resource estimate and financial valuations is frequently well executed, only for companies to discover after acquisition that the ‘social licence’ of acquired assets is in poor shape. Poorly executed resettlement programmes, lack of land-owner agreements, poisoned relationships that can lead to litigation and other traps are frequently not discovered during due diligence because assigned evaluators lack experience and competence and do not know what they are looking for. Acquired assets can rapidly lose value when previously unidentified legal, operational and reputation exposures emerge. Conversely, assets currently trading as ‘damaged goods’ due to seemingly insoluble social issues can be acquired cheaply and in some cases, when properly managed, turned around.
resolution88 offers rapid appraisal of social exposures and opportunity in M&A activity.