Keys to M&A Success: How Serial Acquirers Drive Outperformance

Inorganic growth is an imperative for business leaders across industries. From 2016 to 2025, companies that engaged in M&A outperformed companies that pursued an organic-only growth agenda by 4% in terms of average total shareholder return (TSR) for the period. However, like any world-class athlete will tell you, practice makes perfect.

Serial acquirers consistently outperform

Serial acquirers — companies that make M&A a mainstay of their growth agenda — outperformed those companies that only engage in M&A occasionally by more than 11% and organic-only companies by more than 14% on a weighted-average TSR basis (See Figure 1).

These results include an analysis of more than 5,400 publicly traded companies over the period, and the results are clear: M&A is a key part of a winning tool kit for growth, and those that acquire more often are more effective at driving long-term value for their shareholders.

Over the observed period of 2016 to 2025, only 8% of companies qualified as “serial acquirers” (i.e., made at least one acquisition every year for three consecutive years). These serial acquirers accounted for more than half of deals by volume and at least one-third of deals by value (not all transactions reported deal value).

Serial acquirer outperformance is consistent across markets — from technology and communications, where it is most pronounced, to the finance, consumer, healthcare and industrial sectors (see Figure 2). During the period, the energy sector was the only notable outlier.

However, serial acquirers and non-serial acquirers both struggle to consistently deliver value in transformative deals

One simple lens to evaluate different deal situations, integration strategies, and results is deal size. While there are a wide range of variables that drive deal challenge, deal size is often a reasonable “quick hit” way to gauge complexity and value potential. This study leveraged the following:

• Merger of equals (MOE) — target represents 70% or more of acquirer revenue
• Significant investment — target represents 20%-70% of acquirer revenue
• Bolt-on acquisition — target represents 0-20% of acquirer revenue

The results are clear: Serial acquirers consistently outperform across all deal sizes — from bolt-on deals to MOEs.

However, serial acquirers and non-serial acquirers alike struggle to consistently deliver value in larger, more-transformative deals. This is evident when you observe the significant variance in performance in MOE deals, where TSR outcomes range from (18%) to +28% for serial acquirers and (40%+) to 30% for non-serial acquirers.

Larger integrations introduce complexity in which established integration playbooks fail to deliver. Realizing value in these “bet the farm” moments requires a tremendous degree of strategic clarity, discipline, and flexibility — across a broader set of stakeholders than in smaller transactions. Leaders who are often able to stretch themselves and their teams to drive success for smaller programs can find themselves overtaxed and unable to dedicate the appropriate time to running a high-performance business in tandem with these transformative deals. This reality manifests in overall business performance and in the results from the past decade.

So what are serial acquirers doing to drive consistently higher performance? Here are three secrets to success

No. 1: Serial acquirers drive early connectivity between corporate development and integration delivery

Serial acquirers recognize that maximizing value from M&A needs more than just effective corporate development or integration execution. It requires both, working in tandem and in a highly connected manner. One of the most common pitfalls that L.E.K. Consulting warns clients against is approaching pipeline review, valuation, and integration as separate exercises. The best serial acquirers have operators and integration experts involved early on in the deal process to ensure synergy and execution expectations are realistic and that there is an effective prioritization of effort around core deal value levers from the start.

No. 2: Serial acquirers take a much bolder and more deliberate approach to achieving synergies — including public commitment around the announcement and deal close

This is most notable for MOE situations, where serial acquirers that publicly committed to synergy targets delivered 1.4% higher TSR on average (see Figure 4). We believe this is because the serial acquirers that had a clearer deal thesis and invested early in developing a view on synergies were more prepared and therefore more likely to succeed.

Higher performance when defining and publicly committing to synergy targets is even more pronounced for non-serial acquirers. Non-serial acquirers delivered significantly higher returns when announcing synergy targets (4%-5% better for MOE or significant investment type deals; approximately 2%-3% better for bolt-on transactions) — which reinforces our belief that early development and commitment to synergies translate to results.

However, there was an exception to this rule. Serial acquirers executing bolt-on transactions that did not announce synergies outperformed serial acquirers that did announce synergies. On the surface, this outcome is a bit misleading. From our experience, we know that many high-performing serial acquirers still have internal synergy goal-setting and tracking mechanisms to ensure success — these are core elements of their M&A and integration playbook. However, many serial acquirers that execute a broad set of bolt-on deals each year (or quarter) feel that their success is best publicly tracked and reported in aggregate across a robust M&A portfolio and overall financial results, rather than by individual transaction.

No. 3: Serial acquirers start to develop perspectives on deals in terms of “types” and craft fit-for-purpose playbooks in order to accelerate shareholder value for each type

These targeted M&A playbooks may translate to more intentional integration in select areas, rather than a one-size-fits-all approach. Note that significant, transformative deals (e.g., MOEs) almost always warrant a more bespoke approach. While ultimately developing the right deal types will vary by industry and by company, we’ve outlined one common framework below to help illustrate how understanding your deal thesis and matching it to the right integration strategy can serve to maximize value.

• Core expansion — targets/assets with similar offerings and business models with the primary goal to build scale, access new geography or market and/or acquire customers
• Capability extension — targets/assets with new capabilities; for example, value chain extension, equipment offering development and/or product mix extension

Maximizing value will have different requirements depending on the role of M&A within your broader strategic vision.

Key success factors for core expansion M&A strategy

A core expansion M&A strategy is straightforward: Build scale and buy access to new markets or customers. It’s bigger, not better, and while selecting the right assets is always key, winners essentially do one thing better than everyone else: they move faster. Of course, achieving that agility is not quite as simple as it sounds, but it captures the essence of what it takes to maximize value when employing a core expansion strategy. Ultimately, the speed at which you can identify and integrate (absorb) assets is the primary limiter on your inorganic growth. So how can you unlock that next gear for your M&A engine?

The best serial acquirers will have some form of each of the following:

• A highly focused integration playbook that distills the most essential elements of integration and is fully aligned to drivers of deal value
• An “adopt and go” philosophy, where the acquiring company’s ways of working and systems
  are the presumed end state
• A dedicated individual or team focused on driving integration — a sufficient breadth of M&A know-how across leaders in the business can offset this, but only if leaders have sufficient time to meaningfully dig in
• A clear view of what “done” looks like for acquired assets
• A manner of monitoring progress and ensuring clear (single point of) accountability for completion

One of the most critical success factors in driving successful integration at pace is to quickly develop an integration playbook and to jump-start, or level up, native M&A capability with an approach such as our Rapid Integration Deployment; developing a robust playbook is key to building the M&A muscle to execute on further acquisitions and integrations, with or without third-party support.

Key success factors for capability extension M&A strategy

A capability extension M&A strategy comes with a different challenge: How can you cut through the noise and quickly identify the secret sauce that enables the new capability central to the deal thesis? Similar to a core expansion roll-up strategy, a disciplined approach and integration playbook are still a good foundation; however, to maximize the value of a new capability, there will be fundamental differences in the target that must be identified and preserved. Effective identification of which differences are critical (and which are not) is essential to avoid underperformance relative to expected synergies or, even worse, strangling the target business altogether.

The best capability builders via M&A are surgical in their prioritization. They will:

• Clearly communicate with the target the desired capability, its role and the expected synergy within the broader NewCo
• Cut through the noise of broader integration and rapidly distill key enablers (elements of culture, structures, systems or ways of working) that are essential to the target’s complementary capability(ies)
• Constructively challenge the target’s ways of working elsewhere and offer support where NewCo competencies may help drive effectiveness and/or efficiency
• Integrate selectively (or not at all), ensuring key enablers are ring-fenced or elevated
• Apply ruthless focus to ensure the target’s core business is preserved, growth synergies are unlocked and must-have or nonnegotiable integration elements (e.g., financial reporting, compliance) are executed; only afterward is broader integration pursued

Navigating more-complex or hybrid roll-up strategies

Inevitably, opportunities will arise that do not fit cleanly into one of the above deal types. Frequently, these are larger or more-complex transactions that may add scale and/or new capabilities simultaneously (i.e., more-transformative deals that will reshape the future of your business).

In spite of the increased complexity, the key success factors for core expansion or capability extension roll-up strategies still hold true. The challenge for acquirers is to strike an effective balance between driving to “best of both” in key areas and still deploying a more focused and selective approach elsewhere. This is not an easy task, and it is why so many businesses fail to achieve the desired result from M&A. In these instances, a unique blend of integration know-how and deep industry expertise is critical to ensure each integration decision can be tied back to how you win in the market. Sourcing the right talent externally or finding the right partner to help deliver and to coach your team can help ensure you realize the full potential value of the deal and continue to deliver shareholder value quarter after quarter, year after year.

For more information, please contact us.

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