M&A Outcomes Can Be Predicted and Improved Using Behavioral Strategy New White Paper from Perth Leadership Institute

(Gainesville, Florida, March 13, 2012) Most M&A transactions either fail or don’t achieve the aims of the parties to the transaction. A breakthrough new behavioral approach from Perth, BBM — Behaviorally-Based Merging, allows the profitability and valuation outcomes of M&A transactions to be predicted and improved using a totally new approach developed by the Perth Leadership Institute.

The Perth Leadership Institute, the industry thought leader in business acumen assessment and development programs, today announced that it has released its new White Paper, “M&A Outcomes Can Be Predicted And Improved Using Behavioral Strategy” This paper is based on ten years of field work and research by the Perth Leadership Institute. The approach is based on a behavioral finance framework developed by the Institute.

The White Paper points out that the majority of M&A transactions fail to achieve the sales, profitability and valuation outcomes planned by the leaders of the parties to the transaction. This results in massive shortfalls in the equity outcomes. This has not only deleterious microeconomic and shareholder impacts, but also major adverse macroeconomic impacts.

According to Dr. E. Ted Prince, Founder and CEO of the Institute, “Traditional economic and financial analysis has failed at predicting the outcomes of mergers and acquisition transactions. This is because it takes a very narrow financial approach which does not take into account the financial behaviors of the management teams involved, or the financial cultures of the two organizations which are parties to the transaction. Unless this is done it is not possible to accurately predict M&A outcomes in profitability and valuation terms unless the conditions are extremely narrow, which is rarely the case. The approach developed by the Perth Leadership Institute allows this to be achieved. The Behaviorally-Based Merging approach we have developed allows predictions to be made using behavioral information that hitherto has never been able to be formally included in a M&A proforma. This allows the parties to the transaction to develop a behavioral proforma and a Behaviorally-Designed Management Team, which are architected to achieve the target valuation.”

The Perth Leadership Institute has developed innovative approaches to leadership styles and financial impacts based on its research into business acumen. These form part of its business acumen assessment and development programs for managers and executives. It has developed business acumen assessment instruments, such as the Financial Outcome Assessment®, used by executives and managers to increase their financial and valuation impact.

The Perth Leadership Institute was founded in 2002 in Gainesville, Florida, by Dr. E. Ted Prince to carry out research into the linkages between behavior and company financial outcomes. Its programs are targeted at executives and managers and are used for leadership and executive development, talent management and to improve individual and team financial performance at the middle and senior levels of organizations.