As the global markets see the number of M&As rise, creating and sustaining the value of the deal is of key importance, according to PwC director NV Sivakumar. Conducting relevant Due Diligence Reports (DDRs) is also imperative and a growing industry trend prior to the M&A.

Presenting a paper on value enhancement in acquisitions and mergers at the IT & Stock Market seminar at the Indian Institute of Management Bangalore (IIMB) on Tuesday, Mr Sivakumar said M&A were currently the new growth paradigm for companies to sustain and attain quick growth levels.

"Consolidation of markets/brands, access to new distribution channels and attracting global technical talent are some of the key drivers for M&A's today," he said.

Addressing the need for Due Diligence Reports (DDRs) in today's M&A driven market, Mr Sivakumar said the process served as a search and screening process which looked at three key aspects - the level to which the shareholder interests are met, how much the deal is worth and whether the company can afford it.

"An in-depth DDR confirms that there are no blackholes in the proposed deal, highlights the key areas, negotiable issues and identifies the potential deal breakers," he said.

Different kinds of DDR's are currently popular in the market, each focused on specific aspects of the proposed deal. Vendor DDR is one new trend in the market which is aimed at understanding the pitfalls that a company might face when looking at exiting a venture. This method specifically evaluates the buyer psychology, identifies the advantages in the deal and also seeks to reduce the deal time.

The `No Access DDR' is targeted at deals where there is a tendency for the information flow to be constrained or unavailable especially in cases like auction deals.

`Market DDR', another fast growing method currently is used to analyse the market and clearly understand if the acquisition target is well placed in the market and also takes an overall macro-view of the implications of the deal.

"Following the DDR, post acquisition scenario is often one where there is a lobbying for posts. As a result, there could be too many managers handling a particular function. Therefore placing the right people in the right place is the key to capture value and accelerate the post deal transition process," Mr Sivakumar said.

Considering that timing was all important, the improper handling of post acquisition issues could result in the break of the deal/value for both parties involved, he added.