Merger Acquisition Integration Considerations

merger acquisition integration

One of the most crucial aspects of an effective merger acquisition is the integration phase. Often overlooked by companies until it’s too late, the process of acquisition integration can determine the success or failure of the deal. It doesn’t matter if the goal is capital, cost or revenue synergies acquisition integration is an enormous undertaking that requires time and effort to complete effectively.

A lack of M&A planning and execution has resulted in numerous companies not gaining the financial advantages of a merger. The primary reason is lack of alignment and commitment in the leadership team facilitating integration processes. The first step is to identify and develop those with the drive and expertise to successfully lead integration efforts. This includes the M&A team and all the functional teams involved, such as finance and human resources, operations, etc.

Another key element of M&A integration is to set up clear tracking mechanisms that connect the process to the P&L. This requires establishing clear KPIs that incorporate the business model of the company you are targeting, not just the acquirer’s. This will ensure that the appropriate measures are being tracked and the proper targets are set.

An integration director should be involved as soon as is possible. This can be done in the diligence process, and will help optimize the value of the target by identifying synergies not being realized. An experienced integration director can identify the opportunities and ensure that they are taken into account in the value of the target.

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