Winning the race for new talent, technology, and global reach

How a fast-growing start-up employed a bold M&A strategy



Advanced technology start-up


Industrial manufacturing

Primary goal

Build capabilities and enter new markets to accelerate growth  

Key KPMG services

Merger and acquisition (M&A) strategy, human resources (HR) strategy, financial due diligence, accounting advisory services, economic valuation services, and more.

Technological innovation is moving at warp speed—with rapid advances in everything from commercial space flight to vertical take-off and landing (VTOL) aircraft to autonomous vehicles. Our client, a fast-growing advanced technology start-up, was one company striving to win the race for innovation. They faced intense competition and pressure to gain advantage. Success required moving fast and combining a rare mix of world-class engineering, operational excellence, and access to capital.

To catch the competition off-guard, the start-up pursued an ambitious M&A strategy to rapidly build capabilities and reach new markets. Our client trusted KPMG to serve as their deal adviser throughout the journey—for industry experience in advanced technology, wide-ranging M&A experience, and an unwavering focus on realizing strategic value at every step of the deal.

Key outcomes

Multiple global deals closed concurrently

Billions added to the valuation

Hundreds of millions saved by avoiding financial missteps

Significant increase in the engineering talent base

Leading technology and support facilities acquired

First units acquired for global expansion

New back-office operations built from the ground up

Client transformation journey

Complex deals often bring both the greatest reward and the highest risk. Success requires a different level of insight, speed, and operational experience to meet adversity and surprises along the way. But, as our advanced technology client shows, complex deals done right can unlock unparalleled opportunities. It helps to work with experienced advisers who have done it many times before.

– Kevin Prevost, Managing Director, KPMG Deal Advisory & Strategy   

How KPMG served as a trusted adviser throughout our client’s journey

Our client’s M&A strategy was both audacious and complex. Completing multiple, simultaneous deals is hard enough. But the start-up was also using M&A to go on offense—pursuing transformative deals to quickly gain new talent, capabilities, and market access. Seizing these strategic opportunities required exceptional planning, speed, and execution to realize value.

KPMG worked shoulder-to-shoulder with our client throughout the deal lifecycles, supporting everything from initial diligence through post deal implementation. The KPMG team included multidisciplinary specialists with advanced technology experience and functional knowledge in strategy, due diligence, technical accounting, valuation, tax, business process design, and more.

1. Due diligence: Managing risk phase

During due diligence on one deal, KPMG discovered an unexplained investment line item in the financial statements. This was unknown to our client and not initially disclosed by the seller. After a thorough review to understand the implications, the team concluded the investment prevented certain future business actions and impacted deal value. With this insight, the start-up negotiated a substantial reduction in the deal price—avoiding a financial misstep potentially worth hundreds of millions of dollars.

That’s just one way KPMG advised on financial, commercial, and operational due diligence. Additional assessment areas included:

  • Integration strategy
  • Quality of earning
  • HR
  • Information technology (IT)
  • Tax
  • Finance processes
  • Product technology

2. Integration for human resources: Retaining top engineering talent phase

Onboarding top talent was a key objective for our client, but deals always risk employee attrition. Rivals waste no time trying to recruit from acquisition targets, especially in the highly competitive advanced technology job market.

The KPMG HR Center of Excellence helped our client secure employee retention and enable recruitment. For instance, with extensive Silicon Valley experience, KPMG helped align the compensation approach and structure of the combined company to leading practices in advanced technology sectors.

Moreover, KPMG helped plan and execute HR integration for a smooth Day 1—building trust and credibility with employees. These efforts included:

  • Modeling and identifying key talent for retention and transaction success
  • Recommendations on design of compensation packages and benefits
  • Management and execution of the offer letter process
  • Strategic communications to keep employees informed throughout the deals

With our support, our client realized strong employee retention that exceeded industry benchmark.

3. Integration for operations: Building new back-office functions phase

While our client acquired new units in targeted geographies, they lacked robust administrative functions to support the core business. Back-office operations had to be built nearly from scratch.

KPMG helped to establish fit-for-purpose administrative operations—to ensure business continuity on Day 1 and optimize for the long term, with solutions carefully phased to mitigate risk and cost. For example, KPMG designed a solution that enabled the company to begin receiving onboarded employees from the acquisition while new permanent processes and infrastructure were being established.

Moreover, during one sign-to-close phase, KPMG identified that the seller’s system separation approach was unworkable. KPMG recommended what seemed to be the only viable alternative: global deployment of a new Enterprise Resource Planning system for both the target and legacy business. With our client’s approval, KPMG delivered on-time and on-budget, designing and implementing the system in about three months—greatly exceeding client expectations.

KPMG helped stand up operations for HR, IT, accounting and finance, and more, delivering the base capability to operate the global company and support continued growth.

4. Valuation: Recognizing the underlying value in the business phase

With rapid M&A growth, our client needed to update its valuation, as a non-publicly traded entity undergoing material events. But when the KPMG Economic Valuation Services team first valued the company, the results were disappointing. It is not uncommon for an emerging technology start-up to have difficulty communicating its true value.

The KPMG team provided recommendations for a stronger valuation. These included tactical changes to optimize the balance sheet, which had a major impact on how the value was recognized. Moreover, the KPMG Strategy team worked with management to better articulate the business plan—supported by a rigorous, data-driven model.

With recommendations implemented, the start-up’s valuation improved by billions of dollars. This would help build confidence with counterparties, such as investors and potential employees, for easier access to capital and more success competing for talent.

Turning insights into opportunity

Winning the race for innovation with continuous value creation

Working with KPMG, our client completed multiple deals, entered new markets, enhanced operations, and dramatically boosted the value of their business. Given these successes, they continue to work with KPMG for support with M&A strategy and designing and operationalizing future operating models for HR, Finance, and IT as the business expands.

The race for innovation will be fierce. But our client’s M&A journey positioned them for competitive advantage—with new capabilities to bring technologies from the drawing board to global customers.

Do you have ambitious M&A goals? 

We can work closely with you to identify the right opportunities, be ready to meet challenges head on, and drive value at every turn. Let’s start a conversation.

Jono Anderson

Jono Anderson

Principal, Strategy, KPMG US

+1 858-750-7330
Charles Cochran

Charles Cochran

Principal, Transformation Delivery, KPMG LLP

+1 214 840 2000
Kevin Prevost

Kevin Prevost

Managing Director, Strategy, KPMG US