Analysis Of The Effect Of Transformation Through Cross-industry M&A

In recent years,due to the favorable macro policies of the education industry,many traditional industry companies have entered the education industry through cross-industry M&As,and seeking transformation is one of the main directions.However,the operating mechanism and management model of the education industry are very different from traditional enterprises.Whether the education business can achieve better development after M&As and the overall effect are issues worth considering.This article takes Kaiyuan as the research object,which originally belonged to the coal-based instrument and meter manufacturing industry,and realized the transformation to education through the acquisition of Hengqi Education and Zhongdayingcai.By selecting industry benchmark Offcn and industry average as the comparison object,the M&A effect is evaluated from the short-term market response,transformation,financial data,business operations,and education company problem solving,and finally the results are obtained: In the short run,the market gives positive feedback was given,and the cumulative excess return reached 69.1%;in terms of transformation,the instrument business is no longer a high-quality asset and has been divestment;from a financial point of view,the overall performance for the year was increased to 155 million,and the gross profit margin of the education business was higher than the industry average and benchmarking companies.However,two years after the M&A,aggressive marketing policies caused a significant increase in sales expenses,and the decline in the profit of the education company's business led to increased large-scale goodwill impairment,while the divestiture of the manufacturing industry led to an increase in losses,and Kaiyuan 's net profit suffered a large loss,which widened the gap with the industry 's average net profit.Its operating efficiency was basically the same as the industry,but it was significantly different from Offcn.At the business level,the two education companies have synergized in technology and products,and the unit price and campus size have continued.With the improvement,the investment in technology and teachers has gradually increased,but there is a large gap with Offcn;the problems about the needs of scale development,insufficient sales teams,and lack of online platforms existing in pre-merger education companies have been resolved,but they still exist corresponding questions.After analysis,it was found that the M&A transformation did not achieve the expected results for the following reasons:(1)The post-M&A business expansion was more aggressive and there were strategic errors;(2)Kaiyuan 's management team did not respond to the industry environment.From this point of view,the original instrument business management thinking and education business development after the transformation are "unacceptable." At the same time,Kaiyuan also faces related operational risks,integration risks,and goodwill impairment risks.In this regard,corresponding suggestions are given: Kaiyuan needs to clarify the strategic direction and development goals;improve decision-making and operating mechanisms to reduce operational and strategic errors;strengthen group management and integration,and improve efficiency.