DealRoom – Best Practices for Post-Merger Acquisition Integration
Inadequate post-deal integration procedures are the most common reason for M&A failure. DealRoom helps companies avoid common mistakes and increase the value of their M&A deals by assisting in the post-acquisition integration process.
The sequence, focus, and pace of post-deal integration should be specifically tailored to reflect the goals and value-added sources that justified the purchase in the first in the first. It may sound obvious, but many businesses use generic best practices and off-the shelf plans that focus too much on process and do not consider the unique aspects of their deal.
One company, for instance recognized that R&D was the primary source of value when they acquired, but because the core product of the acquired company was still being developed, they decided to leave out the cost synergies and concentrate on growth by leveraging the new company’s sales channels and capabilities in a more strategic manner. They then would reevaluate their decision to fully integrate R&D over the long-term.
One of the most important strategies for successful mergers is to assign line managers the responsibility of capturing revenue and cost synergies. This ensures that line leaders have the right incentives and responsibilities for driving the tactical execution of their plans, and it helps to monitor progress against objectives in real time. We’ve seen it’s beneficial to set up the capability to hold short, meetings that are iterative, with clear goals and deadlines, so that teams can reorient their goals and focus while navigating through PMI cycles.
