M&A Finance Integration

M&A Finance Integration Plans, Charters, Checklists, Presentations, Synergy Tracking Tools, and Best Practices

Finance and accounting has many responsibilities during a post-merger integration including standardizing accounting policies, harmonizing budgeting and planning, making staffing decisions, consolidating and closing the books, and tracking integration synergies and costs.

Along with managing the additional integration workload, Finance has to continue to meet legal requirements and deliver timely and accurate data for decision making.

The documents in this section of the web site can help finance and accounting teams scope and plan their integrations and track their progress. 

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Finance Plans

Finance Checklists

Synergy Best Practices and Tools

Finance Presentations

Finance Plans

M&A Finance Day 100 Integration Plan

M&A Finance 100-Day Integration Plan

Over 110 Finance initiatives/tasks to be completed in the first 100 days after close.

Organization
Determine org chart for F&A
Determine employee retention plan for F&A

Accounting Variances
Obtain inventory of Company B accounting policies
Determine plan for migrating Company B to Company A policy & procedures
Apply Company A's Management Reporting structure to Company B
Map chart of accounts ...
Finance: 4 M&A Integration Charters from Different Acquisitions

Finance: 4 M&A Integration Charters from Different Acquisitions

Excerpt from First of Four Charters

PreClose / Planning

  • Retention Plans: work with teams to define costs
  • Day 1: Ensure plans developed to ensure readiness for Close
  • Org. Structure:  Finance team migrates to Acquirer reporting Day One . . .
M&A Synergy-Based Incentive Plan

M&A Synergy-Based Incentive Plan

Synergy Plan Overview

  • Executives have a synergy-based incentive target on top of the current annual incentive plan (AIP)
  • Department heads will have the ability to allocate discretionary pools to other employees
  • Eligibility: Management plus other employees involved in workstreams
  • Synergy goals are set as an add-on to the current AIP
Post-Merger Integration Cross-Border Finance Plan

Post-Merger Integration Cross-Border Finance Plan

7-Page Finance Plan from a Cross-Border Merger.

Excerpt

Finalize and communicate organizational structure
Coordinate closing process for August 2024
Establish initial treasury linkage to Acquirer

  • Weekly cash forecast process established
  • Weekly conference call re: cash position set up
  • Presentation by NT on capabilities to replace lock box

Develop Tax Efficient Global Reorganization of Acquirer. . .
Finance & Accounting 90-Day Acquisition Integration Plan

Finance & Accounting 90-Day Acquisition Integration Plan

Finance & Accounting 90-Day Acquisition Integration Plan that incudes 93 tasks grouped in the following categories: Budget and Forecast, Insurance Coverage, Limits of Authority, Insurance Policies, Reporting Process, Purchase Price Accounting, and External and Internal Audits.

Excerpt:

Sub-Work Stream Budget and Finance

To obtain Acquired Co. FY25 budget for incorporating into NewCo budget - communicate with Acquired Co. entities/agree on deliverable format 
To discuss/align on deliverables -  Budgets in systems
Prepare NewCo budget - high level P&L for Day 30
Prepare NewCo budget - detailed level P&L, BS and CF for Day 60
Make adjustments for synergies / disynergies ...
 
 

Finance Checklists

Post Merger Integration Finance Checklist

Post-Merger Integration Finance Checklist

Over 110 finance integration tasks grouped in the areas of synergy tracking, chart of accounts, cash management, accounting policy variances, accounts payable, and accounts receivable.

Synergy Tracking

  • Determine synergy tracking approach.  Decide on system and method.
  • Identify team members and responsibilities.
  • Create detailed implementation plans
  • Create synergy tracking model templates
  • ​Develop ongoing status reporting format and timing...
Finance Integration Checklist

Finance Integration Checklist

A global company's finance integration checklist of 155 activities.
Acquisition Integration Accounting Checklist

Acquisition Integration Accounting Checklist

Acquisition Integration Accounting Checklist covers 88 integration tasks in areas such as treasury, synergy tracking, organization design, taxes, operational reporting, and financial close.

Excerpt:

Treasury
Implement plan for inter-company sweep and settlement to acquiring company's lockboxes / GL
Lockbox implementation / closures
Move accounts to same cash management platform
Close Acquired Company's bank accounts
Adjust for Target once final structure determined ...
Acquisition Integration Finance Checklist

Acquisition Integration Finance Checklist

Newco - Finance Organization

  • Schedule a work session with key stakeholders to assess functional redundancies and begin construct of attrition plan
  • Build roles/responsibility matrix
  • Construct a draft organization chart
  • Conduct follow up meeting with key stakeholders to review draft and gather edits
  • Schedule and conduct presentation meeting with decision making executives to present organization chart and gather further edits
  • Revise new org chart. . .
Finance M&A Due Diligence Checklist

Finance M&A Due Diligence Checklist

Cash Flow:

  • Cash flow forecast for the next six months
  • Trend line of work capital for the past year, changes relative to total sales 
  • Working capital by segment, product line, and customer
  • Historical and projected capital expenditure requirements

Profits: 

  • Budget projections or business plans for the Business and the Target
  • Capitalized a disproportionate amount of expenses 
  • Any material changes in the financial position of the Business and the Target
  • Past budgets and projections with actual experience in order to assess the accuracy of management estimates
  • Copies of federal tax returns for the last three years
  • Copies of letters to the Target's auditors with respect to current, pending or threatened lawsuits or Target's delayed expenses ...

 
Payroll Merger & Acquisition Checklist

Payroll Merger & Acquisition Checklist

Payroll Disbursement Bank Accounts
Coordinate with HR to identify payroll strategy for each country (e.g. Firm A payroll, outsource payroll vendors beginning Day 1)
 
Coordinate with Legal and HR to identify where payroll disbursement accounts will be needed by country
 
Create plan in conjunction with Treasury to open any new payroll disbursement accounts by Day 1 in conjunction with legal entity strategy and setup
 
Identify all Firm B payroll disbursement accounts by country. . .
Financial Due Diligence Request List

Financial Due Diligence Request List

Excerpt from 4-Page Financial Due Diligence Request List:

  • Quarterly income statement for most recent two quarters
  • Financial projection for next four quarters
  • Amount of forecast guaranteed by contract
  • Most recent business plans
  • A copy of tax returns for the last four years
  • All tax distributions made
  • Past two years’ audit results      
  • Last four years of financial statements
  • Detailed analysis of each balance sheet account
  • Debt instruments, indentures, loan agreements and agreements on documents relating to lines of credit ...

Synergy Best Practices and Tools

M&A Synergy Best Practices

M&A Synergy Best Practices

M&A realization best practice tips

  1. Assign synergies to accountable owners and then hold them to a plan 
  2. Follow up on agreements on planned measurement approaches and their timing 
  3. Ensure initiatives are supported and linked to integration related projects 
  4. Manage cross-functionally to ensure costs are not simply shifted to other parts of the business …
M&A Cost Synergies Report

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:

  1. Severance for reductions in Acquiree positions are generally capitalized as part of the purchase price (if the reduction is made within one year).
  2. Severance for reductions in Acquirer positions are expensed when employees are notified ...
M&A Synergy and Cost Estimates

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).

Finance Presentations

M&A Due Diligence: 30 Common Red Flags

M&A Due Diligence: 30 Common Red Flags

First 5 of the 30 Common Due Diligence Red Flags

  1. Does the company appear to manipulate reserve accounts in order to smooth or enhance its reported earnings?
  2. Is the internal audit team subjected to significant scope restrictions?
  3. Are a large proportion of monthly sales completed during the last few days of each month?
  4. Are any employees of such importance that their departure for any reason would jeopardize the existence of the business?
  5. Is there evidence of continual changes in accounting methods?
The Usual Post-Merger Integration Costs

The Usual Post-Merger Integration Costs

Post-merger integration costs typically range from 3% to 10% of a deal’s value. The actual  percentage depends on the scope of the integration, the operating differences between the merging entities, the number of changes that will occur, and the magnitude of those changes.

These are many of the most typical types of post-merger integration costs...
 
Finance/Tax/Treasury M&A Integration Team

Finance/Tax/Treasury M&A Integration Team

PowerPoint presentation covering the schedule for implementation, non-negotiables, synergies, issues and assumptions, organization changes, and open issues for the cross-border integration in the Americas and EMEA.
11 Typical Post-Merger Risks

11 Typical Post-Merger Risks

Risk #1: Cultural Conflict: Major cultural differences between merging entities can easily lead to friction and misunderstandings that negatively impact employee morale, productivity, and talent retention...

 
M&A Synergy Best Practices

M&A Synergy Best Practices

M&A realization best practice tips

  1. Assign synergies to accountable owners and then hold them to a plan 
  2. Follow up on agreements on planned measurement approaches and their timing 
  3. Ensure initiatives are supported and linked to integration related projects 
  4. Manage cross-functionally to ensure costs are not simply shifted to other parts of the business …
Acquiree’s Finance Sub-Team: Acquisition Integration Planning

Acquiree’s Finance Sub-Team: Acquisition Integration Planning

Content

Mission
Key Decisions/ Operating Strategies
Key Assumptions
Summary of Integration Initiatives
Open Issues/Decisions Remaining
Pre-Close/Day One Items
Integration Risks. . .