DealRoom – Best Practices for Post-Merger Acquisition Integration
Inadequate post-deal integration procedures are the main reason for M&A failure. DealRoom assists businesses to avoid common mistakes and maximize the value in their M&A transactions through the post-acquisition process.
Focus, sequencing, speed, and focus of post-deal integration should all be tailored to meet the objectives and sources that justified the deal. It may seem obvious, however many businesses are reliant on generic best practices and off the shelf plans that concentrate too much on processes and ignore the unique aspects of their deal.
One company, for instance acknowledged that R&D was the main source of value in their acquisition, but because the core product that was acquired by the acquired company was still in development, they chose to ignore the cost synergies and focus on growth by leveraging the new company’s sales channels and capabilities in a more strategic way. They would then reevaluate the decision to fully integrate R&D in the future.
One of the key techniques used to make mergers successful is to give line leaders responsibility for capturing revenue and cost synergies. This ensures that line managers receive the appropriate incentives and responsibilities for directing the tactical execution. It also makes it easier to monitor progress towards goals in real-time. We’ve seen that it is helpful to create the capability for short iterative meetings, with specific goals and deadlines, so that teams can align their goals and work as they move through PMI cycles.
