Willcox, Buyck & Williams, PA Blog

Wednesday, March 14, 2018

M&A Integration - The 10 steps to Success

Well executed mergers and acquisitions can be a boon to the growth of any enterprise. With signs of economic recovery on the horizon, M&As are on the rise. The most common problem facing these organizations is the post-merger integration process. In fact, according to McKinsey research, just 16% of post-merger reorganizations deliver the objectives.

If you are committed to ensuring your M&A transaction is a success, there are a few key steps you can follow. The first, we’ll call it “1a” is to engage the services of a skilled and experienced mergers and acquisitions lawyer. Keep reading to understand the additional steps to M&A integration success.

1. Identify Clear Financial Benefits

If nothing else, all companies exist to make money. If there is no financial benefit to the merger or acquisition, you must ask yourself why you’re going through the process. You need to know where the money is going to be made and what benefit you’re going to receive by going through with the merger or acquisition. If you can’t find the financial benefit, you should just stop here.

2. Determine Whether The Deal is a Scale-or-Scope

When conducting a merger or acquisition, you must know if the deal is to provide an additional source of revenue for your existing business line or if you are branching out into a new line of business. Each has its own separate and distinct path.

3. Define Power Structure & Key Personnel

This is a decision that needs to be made rapidly in an attempt to keep order and keep employees. You should select people from both companies who provide great strengths in their respective fields. Once you have the leadership in place, that will slow down the process of people jumping ship. Stability is key here.

4. Begin the Integration Process Immediately

Begin planning for integration before the deal is made public. Once the deal is made public, the steps you put in place can be swiftly enacted. Your leadership team is in place and can start giving direction and security talented employees. You do not want to wait until the public announcement to start planning for integration.

5. Properly Manage Integration With a Decision Management Office

You will not be able to keep your hand on the pulse of the entire process all of the time. You must implement a talented team of trusted individuals who can focus on the decision making.

6. Choose Integration Team Leaders Carefully

While you can’t have your hands in all of the decision making, you most certainly can and should have direct control over the staffing of the integration team. This is your team of trusted advisors who are making decisions that could have long lasting impacts. You need to be the one selecting these people.

7. Cultivate a Singular Culture

Mergers and acquisitions bring together two companies that most definitely contain two separate cultures. The values, the goals and the atmosphere of each organization will differ, some more than others. You must have unity. That means choosing one set of values to which the new organization will adhere. But it all starts at the top. Whatever culture you decide on, you must lead by example.

8. Develop Trust in the Work Force & Work to Keep It

Mergers and acquisitions create uncertainty in the marketplace but also inside the building. It will be your job to sell the transition to the team. This means walking and talking the new culture and being seen and heard preaching the success and the collective goals.

9. Hit the Ground Running – and Keep Going

Mergers and acquisitions are fun and exciting. But there’s a business to run and you’re the one who has to run it. You need to focus on the existing clientele and on the business operations. If everyone is focused on the merger, no one is focused on the long term goals of the business.

10. Identify Template for Successful Integration – Repeat the Process

Once this is all complete, make sure you have a great record of what went well and what didn’t. This way, the next time you find yourself in a merger and acquisition integration, you can speed through with ease using the right people and the right processes.

If you are planning or engaging in a merger and acquisition, you owe it to your shareholders, your employees, your company and yourself to ensure you are following a strict process for success. For further guidance, contact Willcox, Buyck & Williams, P.A. today for a consultation.

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