Five keys to successful merger and acquisition integrations

By - October 26, 2017

A successful merger and acquisition (M&A) integration requires extensive planning, here are five steps to take to help make the M&A process more successful:

1.) Plan ahead

While this seems obvious, an estimated 70% of integrations fail to fully realize the potential synergies that exist between the two companies, largely due to a lack of planning:

  • The first step is to conduct an operations due diligence evaluation to understand the current state of the target company including the potential opportunities and risks
  • Assemble an integration team that has the knowledge, authority, and capacity to develop and execute the integration plan
  • It is important to define a team structure that allows members to voice their needs and concerns, provides a structure for quickly communicating, escalating, and resolving issues, and holds team members accountable
  • The team should include an integration manager that is able to devote 80% of his or her time to facilitating integration activities

2.) Define the necessities

The integration team will be responsible for developing and executing the integration plan. As they do so, it will be necessary to identify and prioritize the processes that are essential to continuing business operations on day one of the acquisition. As integration tasks and timelines are defined, it is easy to overestimate the number of critical tasks. This does not mean that these tasks are not important and should not be completed in a timely manner, but truly critical items will prevent operations from continuing on day one. Critical items need to be tracked closely and include:

  • Ensuring you have the means to pay liabilities
  • Providing the infrastructure to receive and fulfill customer orders
  • The ability to meet payroll in a timely manner
  • Transferring any licenses, registrations, and other legal designations

3.) Identify, evaluate, and track improvements

Often, an acquisition’s appeal is bolstered by cost-saving and marketing opportunities. This may take the form of consolidating facilities and staff, introducing recently acquired products to existing sales channels, or adopting proprietary processes or technology across a larger number of products. Regardless of the specific opportunities, it is important to identify, quantify, and implement them in a timely manner. This includes defining a completion date, backfilling all of the necessary steps to reach that goal, and consistently tracking the progress of these tasks. While failing to meet these deadlines may not halt operations, implementation delays increase the costs and reduce the return on an acquisition.

4.) Communicate

Communication can play a tricky role in the acquisition process. The early stages of an acquisition are often need-to-know and communication often takes place as needed. As the acquisition progresses, however, developing a communication plan early can help define clear expectations and prevent complications. A well-developed communication plan will include:

  • A complete list of stakeholders (owners, employees, clients and customers, vendors, etc.)
  • A robust list of conversations (regular integration team meetings, an official announcement of the acquisition, communications with the target company’s employees about salary, benefits, and continued employment, etc.)
  • A defined format by which these will take place

5.) Follow through

There is no substitute for thorough planning leading up to the acquisition, but fully integrating an acquisition is an ongoing endeavor. Unfortunately, numerous companies get to closing day and let the integration fade into the background and people again focus on their primary jobs. Management must be prepared to make the integration a priority until initiatives, both short and long-term, have been completed. It takes a great deal of time and effort to complete an integration, so it is essential that a capable integration manager is available to maintain the momentum.

To learn more about how RSM can assist you with your management consulting needs, contact us at 800.274.3978 or email us.


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