DealRoom – Best Practices for Post-Merger Acquisition Integration
Inadequate post-deal integration procedures are the main reason for M&A failure. DealRoom assists companies to avoid common pitfalls and maximize the value of their M&A deals through the post acquisition integration process.
Focus, sequencing, speed, and concentration of post-deal integration should all be tailored to meet the goals and sources that substantiated 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 process and don’t consider the unique aspects of their deal.
One company, for example, recognized that R&D was the main source of value in their acquisition however, since the acquired company’s core product was still in development, they decided to ignore the cost synergies and focus on growth by using the new company’s sales channels and capabilities in a more strategic manner. In the future, they would reevaluate whether they should fully integrate R&D.
One of the most important methods used in successful mergers is to provide line managers with the responsibility of capturing revenue as well as cost synergies. This ensures that line leaders receive the right rewards and responsibilities for directing the tactical execution. It can also make it easier to monitor the progress towards goals in real time. We’ve also seen that it is beneficial to create the capacity for short sessions that are iterative, with specific targets and timelines to allow teams to realign and update their goals and activities as they move through the PMI cycle.
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