Legal: 4 M&A Integration Charters from Different Acquisitions

Excerpt from First of 4 Charters

Objectives (Primary integration objectives to be achieved post close)

Legal support team structure set and 100% populated by Day 1
Revised Internal Audit Work Plans developed and ready to be implemented (Q1 plan must be ready Day 1)
Review travel programs for synergies
Simplify and consolidate records system; reduce costs/burden for combined company
Synchronize contracts and other key legal “forms”; synchronize litigation process; ensure seamless legal support for combined company
Determine cost baseline for Acquirer and Acquired Co.; drive savings through integration

Scope (Primary categories, systems, processes corporate or functional areas to be addressed in team’s plan)

Lawyers, paralegals, support staff; bring Acquired Co. staff into Acquirer systems (Serengeti, Lit. holds, etc.)
Combine Internal Audit staff, systems
Develop updated combined records retention and management system – hard copy and electronic (with IT); rationalize staff, facilities, support
Fold Acquired Co. team members into Acquirer Litigation Processes

Day 1 Mandatories

Provide legal support to all businesses and functions so they are “100% operationally functional” on Day 1, including: all contractual flow between entities in the merged company and all third-party facing relationships (E.g., Acquired Co. Marketing)
Legal Staff (lawyers, paralegals, etc.) in place and 100% ready to go on Day 1, with communication on how to obtain legal support.

Day 1 Prep (Critical information and/or assessment activities that must be completed pre-close)

• Advise on Acquired Co. and Acquirer third-party  agreements/commitments implicated by merger requiring pre-notice /notice or “decisions” – e.g., change of control, “most-favored customer” provisions, add-on supply agreements, leases, etc. – primary impact will be on Acquired Co. but Acquirer agreements need to be reviewed too
• Identify any operational restrictions resulting from organizational structure or other contractual obligations (e.g., debt instruments)
• Update Acquirer Corporate Delegation of Authority to add new positions; cascaded DOAs from new VPs in place as needed
• Support/make any changes needed in relation to Day 1 changes to corporate structure, entities, business names, product flow.

Issues/Risks

Not learning from business & functions with sufficient lead time where Legal needs to assist with legal obligations/third-party facing matters where contract change, notice, and action is triggered on Day 1.  This issue also continues Day 2 onward
Inadequate resourcing to address commercial issues posed as we integrate third-party vendors (contract terminations, etc.)  That plus operational demands and learning curve/transition issues put both integration execution and synergies at risk
Adequate support for the combined scale of the businesses, especially the “new to Acquirer” separated business
Internal Audit must be ready for Q1 work to support 10-Q filing

Cross-Team Dependencies

Need quick input on office closure/relocation plans that might impact Legal staffing options/decisions
Need early/ongoing visibility into business and function integration plans that will require commercial or other legal support
Work closely with leaders of business
Work with Tax on corporate structure/Acquired Co. entity name change plans & timing to address legal/contractual impacts ...