Successful Merger & Acquisition Integration Process

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In the last couple of years, we have seen more mergers and acquisitions taking place. In talking with various clients that have gone through a merger or acquisition, generally, the first several months of the transition do not go as smooth as everyone had anticipated. It’s never a simple, Company A you are now part of Company B and tomorrow we start doing business as Company C. And, based on what we are hearing and seeing, the merger and acquisition activity will continue, and even increase, in 2017.

Recently, the CGMA (Chartered Global Management Accountant) released an article that discussed 10 ideas for management to consider to help make the merger or acquisition transition smoother. Per the article written by Sabine Vollmer, 10 Strategies to Successfully Integrate a Deal, “Here’s what Whitaker, author of the Mergers & Acquisitions Integration Handbook, suggested to avoid the ten most common integration mistakes:

  1. Start planning the integration 60 to 90 days ahead of the target close of the deal. Plans should include the integration strategy to help prioritize workstreams; complete operational, cultural, and risk assessments; and secure access to due-diligence documents.
  2. Ensure the company’s operating strategy and integration strategy are aligned.
  3. Prioritize workstreams to deliver the most business value. Assigning specific business benefit values helps prioritize workstreams. Reporting to senior management about the integration should focus on high-priority workstreams.
  4. Have integration managers and leaders report on progress and problems to at least one senior executive to ensure consistent focus and accountability.
  5. Create a communication plan that includes frequent updates for all stakeholders, communication drafts for senior executives, and an FAQ log that can be updated weekly and shared with affected employees.
  6. Manage programs to achieve synergies – by stress-testing targets, confirming costs, and making synergy-related workstreams a high priority.
  7. Properly resource integration activities. This may require securing external resources to offload special projects.
  8. Develop a formal end-state transition process with anticipated timing and clarified roles and responsibilities, and document deadlines and deliverables with tasks that aren’t completed.
  9. Clarify the business strategy and operating principles of the post-integration company as soon as possible.
  10. Collect feedback from all stakeholders to continually optimize the integration process.”

While integrating businesses together takes time, and every merger and acquisition transaction is different from the last one, having a plan put into place ahead of time, and communicating updates frequently may help that transition process go smoother for everyone involved. If you’re ever considering a merger or acquisition, please contact us to discuss ways to ensure your integration process can be successful.

If you would like additional information or to discuss this further, please contact Marie Jett, CPA at 317-260-4472 or mjett@greenwaltcpas.com.