Acquisition Integration Best Practices
Ride the Waves: You Can't Avoid the Rough Water
During the early months of merger integration, about the best you can do is manage the blur—ride the waves, so to speak, instead of trying to be boss of the ocean. You can’t avoid the rough water, so you might as well make the most of it …
Acquisition Integration Calls for Bold Strokes
Acquiring and merging an organization represents uncommon growth. The situation calls for uncommon management, bold strokes, a rejection of status quo management …
Top 10 Ways to Protect Your Career in a Merger
Let’s start with number 10 and count down.
10. Don’t jump in front of a bullet. A lot of hours, energy, and effort have probably gone into making your merger happen. Going forward, chances are good you won’t be able to reverse any of senior management’s decisions. Therefore, think twice before you voice any emotionally-charged negative opinions. Bad mouthing the merger holds little promise of changing anything and it can be harmful to your career ...
A Slow-Paced M&A Integration is a High-Risk Strategy
Employees need answers. They want closure. What they can’t stand is “not knowing,” and having to continue working in an atmosphere of uncertainty and destabilization.
A lengthy, slowly paced integration is a high-risk strategy …
Put Dollar Signs on Your M&A Decisions
We find that costly decisions are often made in management's attempt to generate goodwill. Companies are inclined to overspend in their attempts to buy loyalty, or to reduce feelings of guilt that stem from unpopular actions ...
Best Practices: M&A Integration Process
Implement an overall program management process to:
- Monitor progress against the key milestones
- Raise and resolve issues and address risks quickly and efficiently
- Make cross-functional decisions rapidly in regular steering team or executive team reviews …
The Need for Superb Project Management in Post Merger Integration
Disorganization gets dangerous during an integration. Let’s face it; merging is confusing enough even when good project management practices are in place ...
How Much Resistance to Change is Normal?
What sort of push-back is predictable in an M&A integration? How much resistance is “reasonable”?
If you have a reliable frame of reference, you can put things into perspective. Knowing what’s “normal,” you’ll have a better feel for how you should react to the particular situation facing you. So let’s look at the typical scenario.
We’re dealing in generalities here, but the breakout usually goes about like this.
Some 20 percent of the people in the acquired company are “merger-friendly.” They’re clear advocates who willingly embrace the combination. You can depend on them to help drive the program. Another 50 percent of the folks sit on the fence. They assume a so-called neutral position, trying to figure out which way to lean. They’re not necessarily hostile to the merger, but they’re not helping like they should. The remaining 30 percent are the resisters. They’re …
The 10 Change Management Steps in Mergers & Acquisitions
1. EXPLAIN THE REASONS FOR THE CHANGE.
Usually the best steps in dealing with problems are the preventive ones.
Perhaps the most effective way to minimize resistance is to make sure people in the organization have a good understanding of the rationale for the changes ...
Push Through The Yield Point
Opposition surfaces as soon as the integration process gets underway. Resistance starts to climb. You push to change the organization, and it starts pushing back ...
Announcement of Acquisition to Customers, Employees, and Vendors
Acquisition Announcement Letter to Employees
Today marks a historic and exciting milestone for all of us: the transaction to combine the Acquirer and Acquired Co. is complete. Together, we will form a stronger business, drive further growth and innovation, and create more value for our employees, customers and stakeholders.
Acquirer and Acquired Co. have been on parallel tracks to ...
Welcome Letter to Employees After an Acquisition
TO: Acquired Co. and Acquirer Employees
Today, we have completed the acquisition of Acquired Co. We have the unique opportunity to build upon our complementary portfolio, strong businesses, recognized brands and quality products to become one of the leading companies in our industry. To our newest employees, let me be the first to welcome you to Acquirer...
Company Merger Announcement Letter to Employees
Today, we announce exciting news: Company A has completed its with Company B. This is an important day for our organization and one that ensures we remain a highly competitive global company.
We plan to quickly integrate the company and finalize the corporate organization structure within the next 90 days. The success of our integration effort will be driven by how effectively our employees work together to deliver value to our customers and results to our bottom line ...
How to Communicate Mergers or Acquisitions to Your Customers
Examples of communications to customers from three different acquirers and deals.
Excerpt from first example:
T4 has recently announced its agreement to purchase OCN to become one of the foremost business service providers in North America. This provides our customers the opportunity to access an enhanced service portfolio over a larger geographic area. T4 is and will remain committed to supporting our customers’ mission critical requirements ...
Letter to Customers After an Acquisition
We have announced exciting news: Acquirer and Acquired Co. have completed the transaction to merge our operations.
This is a game-changing combination which will provide us with the scale, geographic reach, and capabilities to solidify our position as a leading provider of materials in our industry. Going forward, you will receive even more value from our products:
- We will have a greater portfolio of quality products and a family of brands as well as increased capabilities to innovate superior products and systems
- We will tap into Acquired Co.’s industry-leading technology ...
Acquisition Letter to Customers
Today, we announce exciting news: Company A has completed its acquisition of Company B. This combination creates an organization even better able to serve customers and compete in the global marketplace.
Our new name is Company AB and our company's website is now CompanyAB.com. The name change symbolizes our intention to broader our business platform and deliver more value to our customers.
We know our success is dependent on your success, and we are excited about what the new Company AB has to offer:
Acquisition Announcement to Suppliers and Answers to Supplier FAQs
Acquisition Announcement to Suppliers
Answers to Supplier FAQs
Excerpt from Supplier FAQs
- What is the purpose for Global Procurement?
To provide the largest volume opportunity for our supplier business partners. We believe that with larger volumes the supply base’s manufacturing cost will be lower, thereby reducing our cost.
- What are the short and long-term implications?
Short Term - We will be focused on reducing our supply base to maximize the volume for selected suppliers. Longer Term - We will work to integrate more with our smaller supply base, and to learn how to combine our resources with those of our suppliers. This will include logistics ...
Company Merger Letter to Vendors
Dear Valued Supplier,
Today, we announce exciting news: Company A has completed its acquisition of (merger with) Company B. This combination creates an organization even better able to serve customers and compete in the global marketplace.
Our new name is Company AB and our company's website is now CompanyAB.com. The name change symbolizes our intention to broaden our business platform and deliver more value to our customers.
We are excited about what the new Company AB has to offer: . . .
M&A: Employee Questions and Answers
Expect These M&A Questions
The deal will create numerous questions in the minds of stakeholders. By anticipating their concerns in advance, you’ll be better prepared to address them …
Answers to Employee Post-Merger Integration Questions
Answers to 43 common frequently asked questions by employees on the front-end of an post-merger integration.
- Will offices or other facilities be closed?
For the time being there will be no changes and we will continue to go to market as we have in the past. We will begin immediately to get to know each other and develop plans to combine our businesses in the most effective way ...
M&A Day 1 Answers to Employee Frequently Asked Questions
Excerpt from Answers to Employees FAQs
- Is the purchase/sale of Acquiree to Acquirer finalized?
Yes. The U.S. Department of Justice (DOJ) and Acquirer have entered into an agreement which permitted the acquisition to proceed. The Acquirer and Acquiree have both received Board and Shareholder approval and we have officially closed the deal.
- What Acquiree offices are included in the sale?
All Acquiree’s operations in North America, Europe, and Asia are included in the deal..
When and What to Communicate to Employees in a Merger and Acquisition
Upon announcement, let employees clearly know:
- The reasons behind the combination
- Specifics of the agreement
- What the company and its people will gain or lose …
Private Equity Acquisition - Talking Points and Answers to Employee FAQs
Talking Points for Executives at Employee Meetings
Answers to Employee FAQs
Excerpt from Talking Points for Executives at Employee Meetings
- Welcome everyone! It’s a pleasure to meet with you today. We’ve invited you here to celebrate the announcement of our acquisition by a highly regarded, successful private equity firm,____________.
- Our acquirer provides management and oversight for the multiple businesses in their portfolio, which will soon include our company.
- I’d like to remind you that the deal has only been announced. It has not closed. We anticipate closing the deal by year-end, but it’s not final yet. We’ll let you know as soon as the contract is signed.
- We’re keeping our company name and brand. Our sterling reputation for quality products and excellent service will help us retain existing customers and acquire new ones.
Employee Meetings: Announcement, Day One, and Post-Close
Critical communication meetings with employees occur:
1. Announcement Day
2. Close Day
3. After Close–Benefits Briefing
These meetings are prime opportunities to inform people, engage them in the transition process …
Information Technology: Day 1 Answers to Frequently Asked Questions
Most IT processes and procedures will remain unchanged on Day 1. Acquired Co. and Acquirer’s IT teams will be working closely together over the next several months to bring our IT systems together in the way that best suits the needs of the business. In the meantime, review the FAQs below to learn more about the IT transition and what it means for you. For even more information, check out the FAQ on Integration Central at http://www.ourcompany.com/integration ...
M&A Day 1
The Power of "Opening Moves"
So the deal closes. It’s “Day 1.” Are you ready for one of management’s big moments …
M&A Day 1 Mandatory Initiatives by Work Stream
- Day 1 Mandatories Summary
- Day One Mandatories
- IT Day 1 Status
- East Operations
- West Operations
- Real Estate
M&A Day 1 Onboarding Guide
Today, marks the beginning of our new organization. This Day 1 Onboarding Guide is designed to help you understand changes that are taking place (or will take place) and any actions you may need to take.
The purpose of this guide is to explain:
- What you need to know now (Now: this week)
- What you'll need to know and do in the very near future
- When other changes will take place and when you can expect to hear more about them
You will continue to do your job the same way you did before close. As we continue to integrate our organizations, we will inform you of changes, and if your assistance is needed. This guide covers company-wide information. Your manager will cover information specific to your function.
Day 1 Compensation and Benefits
- Impact on Your Job
- Our Commitment to You …
- Transition Road Map
- Transition Events Schedule
- Important Compensation and Benefit Reminders
- Acquirer Compensation Adjustments
- Compensation - Exempt Employees
- Compensation - Office Hourly Employees
- Compensation - Field Hourly Employees
- Acquired Co. Services Benefit Offerings
- Benefits Overview
- For More Information
Post-Merger Integration Compensation, Benefits, and Policy Changes
Acquiree's Pre-Merger Compensation and Benefits Plan and the Acquirer's Post-Merger Changes in 40 Areas:
- Salary Plans
- Incentive Plans (Cash)
- Restricted Stock
- Exempt Overtime
- Overtime Meals
- Call-Out Pay
- Shift Differential
- Cafeteria Plan ...
Communication of New Benefits Plan Post-Acquisition
- Communication of New Benefits Plan
- Talking Points
- Timeline for Communicating Benefits Program
Employee Briefing on Acquisition
Why Acquired Co.
Market Strength / The People
Acquired Co. Overview
Strategy for The Future North America
Opportunities for Employees
What Has Been Determined Thus Far
M&A Day 1Employee Onboarding Plan
What to Avoid in Employee Orientations
- A tedious data dump
- Boring presenters
- Executives who do “touch-n-go’s” or “flyovers” without any real engagement
- Dumbed-down orientations for employees (separate from managers) …
Sample Merger Announcement to Employees on What’s Changing
- Employee Directory: All Acquired Co. employees will be added to Acquirer Employee Directory
- New intranet site for Acquired Co. employees will be accessible
- Day 1 Email, Phones, Applications, …
Information Technology Help Desk: Key M&A Integration Tasks
- Incoming call & ticket support will stay “as is” on Day 1.
- Both Help Desk teams know who to contact if users request access to resources. Acquirer’s
- Intranet site will have a “cube” with the Acquired Co. support phone number and when clicked, will email the Acquired Co. Help Desk …
Acquisition Integration Post-Day 1
Engineer Early Success in Your Merger
Every merger, once announced, is immediately put on trial. Top management—those who crafted the deal—also stand accused. And the accusers just keep crawling out of the woodwork as several months go by …
Due First 30 Days By Work Stream
Post Merger Integration First 30 Days Checklist
Workstreams include Information Technology, Corporate Finance, Communications, Human Resources, Environmental, Safety, R&D, Procurement, and Business Units
- Develop high-level working assumptions on scope if Acquired Co. moves to SAP
- Prepare rough order of magnitude cost estimate
- Create Functionality Matrix showing all ERP instances and what modules and functionality are used
- Determine initial working assumptions on ERP rollout options
- Complete organization design
- Determine standard desktop and laptop models
- Determine patch management, asset management, and software deployment tools ...
M&A Integration Review 60 Days Post-Close
- Merger Integration Report Card – 1st 60 Days
- Survey – Concerns Raised
- Next 60 Days: Integration Challenges
- Recommendations from Managers
- Executive Dilemmas
- The Tough Questions
- Recommendations for Next 90 Days
- Next Steps
Acquisition Integration UpdateFor Employees 60 Days Post Close
Reductions Guiding Principles
M&A Integration Status Report: First 90 Days
Status of Integration Initiatives
First 90 Day - Initiatives Status Summary
Day 90 M&A Integration Review
- All Team Leads were interviewed; answers were aggregated and kept anonymous
- Output was organized by topic into recap slides for each question
- Questions were centered on broader “Newco” topics …
Post-Merger Integration Update from CEO
First Page of 3-Page Merger Integration Update
It’s now been three months since we combined our companies. I’d like to explain what integration challenges lie ahead and how you can continue to help.
First, I thank you all for your cooperation and hard work. Integrating two companies is tough and I recognize that many of you have put in a lot of additional effort to help the two companies begin operating as one. I thank everyone for their patience ...
Sample Letter: Employee Communication During M&A
What Our Company Needs from You
- Continue to be patient and understanding as we push through some of the tough integration challenges related to the core parts of our business …
180 Day Post-Merger Integration Plan at 90 Days Post Close
- Plan for mid-transition hires
- Communicating changes to salary grade and/or pay adjustments
- Exec Comp: SC compensation changes in System
- All pay changes effective April in System
Post-Merger Integration at 100 Days: The Customer Tolerance Point
HP-Compaq used a M&A integration approach called “Adopt and Go” for making decisions regarding internal processes and IT systems. Rather than debating for months about whose processes were best, they simply agreed on one and went with it …
Post Acquisition: Customer Survey and Letter at 100 Days
About 100 days after Close, it’s a good idea to take the temperature of the two companies’ customers. Chances are they may have experienced some turbulence caused by the transition …
Is Culture Clash Really The Cause Of Your Post-Merger Integration Problems?
Corporate culture often catches the blame when the post-merger integration process runs into trouble. But mergers produce an array of organizational problems that have nothing to do with culture conflict per se ...
Status of Post-Merger Integration Guiding Principles
Status of Integration Guiding Principles
Live our values — no compromise
People think that overall the leadership teams are exhibiting values
Work together — no “us and them”
Still "pockets" of dominant Target and Acquirer groups
Act with urgency — make decisions quickly
Still major concerns around the day-to-day decisions are too slow…
Post-Merger Termination and Survivor Meetings
- Communications for April/May
- Termination Impact Matrix
- Business Rationale for Termination Actions
- WARN Act (Worker Adjustment & Retraining Notification Act) – Fresno only
- Previous Severance Packages
- Current Severance Packages
- Termination/Survivor Meetings by Site
- Email Invitations to Meetings
- Support Materials for Conducting Termination/Survivor Meetings
- Separation Package Contents
- Site Meetings to Follow Earnings Call
- Script for Conducting “Keepers” Meeting
Manage Employee Turnover After An Acquisition
A direct by-product of the acquisition integration process is an increase in employee turnover. It’s a fact of life that, whether planned or not, there will be attrition …
Information Technology Merger Integration Progress
IT Integration Standardization Phase IT phases,
IT Integration Process Enablement Phase
Progress - Task Group
IT Integration Phases
IT Integration Punch List
Post Merger Integration Major Initiatives by Work Stream
Finance and Accounting
Post-Merger Integration Steps on Timeline
- Analysis and Initial Plans
- Design New Organizational Plans
- Implementation Planning
- All Steps by Month
After the Merger: Managing the Shockwaves
After the Merger: Managing the Shockwaves, 3rd Edition
Author: Price Pritchett, Ph.D.
Named “one of the best business books of the year” by Library Journal.
After the Merger provides a clear look at the tasks and problems of post-merger integration. It is first book ever written on merger integration strategy.
This hardbound volume provides a level of detail that will help your team navigate the many potential pitfalls of the integration process. After the Merger is packed with proven strategies that allow you to turn the instability created by a merger or acquisition to your advantage.
Specific topics explored include:
- 6 errors that managers make again and again—and how you can avoid them
- Best practices for handling the 4 major categories of a merger—everything from “rescue” to “raid”
- Ways to defuse cultural time bombs that can destroy mergers
- Separate checklists for managers in both the acquiring and target companies
- Time-saving checklists for executives on both sides
- Importance of conducting a disciplined Merger Talent Audit
Acquisition Integration Playbooks: Day 1 - Day 180
Acquistion Integration Tools
M&A Synergy Best Practices
M&A realization best practice tips
- Assign synergies to accountable owners and then hold them to a plan
- Follow up on agreements on planned measurement approaches and their timing
- Ensure initiatives are supported and linked to integration related projects
- Manage cross-functionally to ensure costs are not simply shifted to other parts of the business …
Strategic Score of Each Integration Initiative
A strategic score is assigned to each of 144 workstream initiatives in a cross-border acquisition integration.
Columns on Excel spreadsheet for each Initiative:
Work Stream, Responsible, Execution by Day 1, Urgency: Hi/Medium/Low, Impact: Hi/Medium/Low, Strategic Score, Ranking in Original Top 10, End State, Impacted Countries, Project Structure, Led By Accountable, Reporting to IMO
M&A Synergy and Cost Savings Report Templates
Excel spreadsheets to track synergy estimates categorized as labor and non-labor, required and discretionary (strategic vs. nonstrategic).
M&A Cost Synergies Report
M&A Cost Synergies Excel Template plus Example of Completed Template
Instructions for Cost Synergy Template
1) Log each integration activity that increases or decreases headcount and/or expenses with projected time frames.
2) Use "Assumptions and Notes" to describe each integration activity in more detail.
3) Notes regarding general accounting treatment:
- Severance for reductions in Acquiree positions are generally capitalized as part of the purchase price (if the reduction is made within one year).
- Severance for reductions in Acquirer positions are expensed when employees are notified.
- Stay bonuses are expensed over the period teammate is required to work.
- Costs related to Acquiree facilities that will no longer be utilized are generally capitalized as part of the purchase price (if the move is made within one year).
- Costs related to Acquirer facilities are expensed.
- Potential sub-lease income offsets costs recorded ...
Integration Dependency Form and Dependency Log
Dependencies mandate tasks be executed in a specific sequence. They should be rigorously tracked because they can help you:
- Determine the right order of activities in the M&A integration.
- Calculate the critical path of the integration
- Identify resource and scheduling issues
- Identify opportunities to accelerate the schedule
Integration Risk Form and Risk Log
A risk is an event that has not happened while an issue is something that has happened.
As you identify each risk, determine which integration team member will be responsible for tracking and reporting it. The owner of the risk is responsible for implementing a plan to resolve a risk if it becomes an issue.
Prioritize your integration risks based on the likelihood that they will occur and the severity of the problem if they do occur.
Company Merger Letter to Customers
We are delighted to inform you that our company is merging with Dodson, Inc., a leader in our industry. There will be minimal disruptions to our business due to the change in ownership. Our leadership team, our headquarters, and our products will remain the same. That means no interruptions in service to you.
Our new owner has the funding to grow our business in a way that will help us realize our full potential and serve you even better in the future ...
Integration Issue Form and Issue Log
Issues are problems, gaps, inconsistencies, or conflicts that occur during the an M&A integration. Issues can include problems with the employees, technology, shortages, or any other problem that has a negative impact. If issues remain unresolved, the integration may suffer delays and overruns. Each issue should be monitored and assigned an owner.
When and What to Report for a Post-Merger Integration
What do you report?
Each team member will provide the following to the M&A Task Force leader: Key Actions/Accomplishments During the Past Week, Key Issues/Decisions Required, Potential Solutions/Help Needed, Next Steps/Actions
How is it reported?
Task Force Leaders compile the individual team member reports into a team report and submit it weekly to the IMO. Alternatively, Task Force Leaders may bring the team's report to a regularly scheduled IMO meeting and review the report with the IMO and other Task Force Leaders ...
M&A Integration Scorecard Template
- The latest version of the Integration Scorecard/Milestones will be sent to you via email each Monday. This version will reflect all updates reported through 5:00 pm (Central) the previous Friday.
- Send all weekly updates to Bill Smith at email@example.com
- Make your updates directly to the latest version of the Scorecard/Milestones ...
M&A Synergy Plan Template
Synergy types include Headcount, Operations, Sales Procurement , R&D Cost Savings, Pricing Rationalization, Procurement, and Cross Selling.
Steering Committee Post-Merger Integration Dashboard
The steps to create an integration scorecard and the categories to cover, plus an example
Post-Merger Integration Dashboard
Post-Merger Integration Status Reported by these Departments:
- Corporate Business Development
- Corporate Communications
- Tax Products
- Customer Support
- Human Resources
- Information Technology
- Commercial Applications
- Product Management
- Sales and Alliances
M&A Synergy Template
The M&A Synergy Template captures synergy description, timing, assumptions, risks, cost to achieve, optimistic, conservative, and most likely synergy projections plus actual net synergies achieved.
Close Out IMO
Post-Acquisition Integration Process: The End-State Transition
How to hand off remaining activities:
- Document deadlines and deliverables associated with the remaining open items
- Provide access to all documentation on the project
- Provide a list of all contacts and stakeholders involved in the project
- Provide a full understanding of what has to be done, by when, and by whom.
- Make sure people have an understanding of the negative implications if the remaining tasks get delayed
What Is an M&A Integration End State? When and How Should Teams Hand Off Remaining Activities?
Every integration needs to have an end. Managing the End-State Transition can be just as important as managing the rest of the integration.
What is End-State?
The point in the integration when:
- The bulk of planned integration activities have already been accomplished
- The IMO processes can be ramped down and dedicated IMO personnel scaled back or redeployed
- The remaining open integration workstreams and issues can be transitioned to a normal operation’s function