Four Common Approaches to M&A Integration That You Should Avoid
We need a more colorful classification system for how companies go about the merger integration process. You know, a new nomenclature. So I sat down and did some reflection.
Going through my memory bank, I pulled up some of the most common patterns …
The Top 10 Distress Signals in M&A Integration
Nobody in their right mind expects merger integration to be a trouble-free process. Simply put, combining organizations is a scratchy drill …
The Most Common Complaint During M&A Integration
By Price Pritchett
Employees find lots to gripe about when they’re being acquired and merged. Looking back across my three decades of consulting on M&A, though, one complaint stands out clearly as people’s #1 gripe …
The Most Dangerous Phase of M&A Integration
The journey from “deal announcement” to “integration complete” is a hazardous trip. You expect problems. But the most treacherous terrain often takes executives by surprise ...
M&A Failure Feeds on Itself
The merger is a major distraction for people in the acquired organization. It interferes with their work focus and undermines job commitment. This, plus the destabilization that is simply generic to mergers, causes productivity to take a damaging hit during the transition period ...
Is M&A Integration Harder than Rocket Science?
People often overrate themselves, not in rocket science, but in other areas of their lives more familiar to them ...
Which is Easier—Making the Deal or Making the Deal Work?
While you wrestle with that question for a minute, think about how much money is at stake. Then consider the number of people in the two companies ... all the careers that are involved ... the lives you’re playing with here ...
The Post Merger Integration Costs Due to Bad Management
How can you tell if a merger is being mismanaged? You will see several of these major problems and the costs that accompany them: ...
Post-Merger Sales Integration: The #1 Hotspot
There’s an old line that says, “If mama ain’t happy, nobody’s happy.” Adapting that notion to the world of M&A, I’d say, “If Sales ain’t happy, nobody’s happy …"
Six of the Most Common Mistakes in Post-Merger Integration Management
The following missteps occur even in well-run companies with highly capable executives at the helm:
1. Lack of a clearly defined Integration Manager ...
Why Do Mergers & Acquisitions Fail
How do seemingly good deals go bad? Here are the ten reasons why:
- Paying too much. Some companies feel they have to overpay to block a competitive bid or to protect their turf. But when too much is paid, it can kill any chance to achieve a satisfactory return on investment ...
M&A Integration Shockwaves
The shockwaves from a merger can badly disrupt day-to-day operations. The tremors start when employees worry about how they’ll be affected by the deal, fret over a myriad of integration problems, and commonly waste time waiting for answers or just being confused about how to proceed with their work. Overall, business suffers ...
Man Walks Into a Bar . . .
By Price Pritchett
A man walks into a bar and says, “Give me a beer before problems start!” He downs it and orders another, saying, “Give me a beer before problems start!” The bartender looks confused. This goes on for a while and after the fifth beer, the bartender—now totally perplexed—asks the man, “When are you going to pay for these beers?” The man says, “Ah, now the problems start.” ...
Post Merger Integration Challenges
Even though your deal may look great, you should be aware of some of the common post merger integration challenges you may face. So let’s take a look at what could prove to be very painful if you don’t manage your merger properly ...
The 10 Common Post-Merger Integration Mistakes that Create Problems, Issues, and Challenges
This Post-Merger Integration presentation is a crash course on M&A integration that condenses into 10 slides PRITCHETT's recommendations on how to avoid post-merger problems.
- Little or No Pre-Close Planning:
When planning does not start before close, an integration starts more slowly and takes longer.
- Unclear Integration Strategy:
Acquirers should define a clear integration strategy early and before their teams begin to develop plans ...
Post Merger Integration Issues, Risks, and Dependencies
- Tight timeline, limited information gathering leads to organizational/infrastructure decisions and less than optimal outcomes
- Inconsistent communications to the stakeholders between the two companies
- Disruptions in the business due to systems issues
- Loss of key employees and contractors leading up to and during transition …
What is the #1 Cause of Merger Failure?
The webinar reveals:
- Why culture incompatibility makes a good scapegoat
- What failed marriages have in common with failed mergers
- How cultural diversity can be an asset, not a liability
- What successful deal makers do when major integration problems are anticipated
- How high premiums increase the likelihood of large shareholder losses
- Why most companies do not hire outside consultants to conduct cultural due diligence
M&A Integration Risk Management
Risk Assessment Questions
- What are the most sensitive areas of the business that might be prone to disruption?
- Are major IT system integrations required to realize synergy benefits or operational efficiencies?
- Are there any key managers or salespeople that might leave as a result of the deal?
- Are there any past business practices that are incongruent with the Newco’s (or acquiring company’s) business strategies (for example, credit standards for new customers)? …
M&A Due Diligence Checklists - Sales, Marketing, and Operations
Comprehensive 95-page sales, marketing, and operation guide to conduct thorough, effective M&A due diligence.
One of the most difficult aspects in business evaluation is understanding and justifying forecasts of future revenues. Section I of this guide provides a micro-style analysis of marketing and sales. The section asks numerous specific questions about twenty-five company functions that, together, address the ability of a business to gain and retain profitable customers.
Sections II through VI help the analyst develop a macro evaluation of the ability of other functions and departments to deliver on marketing’s promises to customers and prospects.
Section VII acts as a strategic summary, where detailed facts gathered earlier can be consolidated into an overall perspective of the company and its relative position in the industry. The summary helps the analyst develop and support conclusions. The additional information gathered during the analysis may lead to ...
M&A IT Due Diligence Checklist
Excerpt from IT Checklist
- Systems for which management is dissatisfied. Corrective measures taken or planned
- Employees with exceptional skills in writing software, developing systems, or troubleshooting problems
- Systems manual maintained, up to date, and followed
- List of all information systems utilizing computers and their function in the business. Type of machines, software, their age, number, and location of units
- Backup and disaster recovery procedures and programs
- Level of difficulty anticipated to integrate the company’s databases into the buyer’s systems
- Policy on the issuance of mobile IT equipment to employees. List of all mobile equipment and to whom it is issued
- New information systems scheduled to be added or to replace existing systems
- Systems that use third-party software and custom-built solutions. Third-party systems under maintenance contracts
- IT employees responsible for system support and security. Security systems and practices are in place to protect the systems ...
Post Merger Integration Legal Checklist
Gather and review ligation closed (<5 yrs) to current
Determine and review budget set aside for each case
Assess the merits of current case(s)
Assess the financial exposure (Judgment & Legal Costs)
Report any key findings/concerns to the general counsel, corporate development and executive team
Contracts/Obligations Operational Contracts Review:
Review all "Standard Form Agreements" utilized by Target Co.
Review all "Operations Agreements" of Target Co. ...
HR Due Diligence Information Request Checklist
8-Page HR Due Diligence Checklist:
- Organization charts and a description of management structure, including principal functional areas, headcount by area. and reporting relationships.
- Job descriptions for all major job categories and minimum education, experience, and skill levels required for each.
- Current pay ranges and recent increases.
- List current personnel (including lists of officers and directors) with hire dates, current annual salaries, bonus targets (if applicable), commission targets (if applicable), years of service with the Company, site location, highest educational degree, and prior experience ...
Merger Integration Risk Analysis
A penetrating look at key pressure points that impact the integration process.
- Amount of expected consolidation or integration
- Alignment/compatibility of the two organizations’ business strategies
- Extent to which the two organizations have been competitors
- Financial pressures confronting the merged organization
- Level of confusion or ambiguity regarding the merged organization’s power structure
- Geographical distance between the merging organizations …
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.
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.
Risk-Based Preacquisition Due Diligence Review Template
The value of every business and the buyer's realized return is ultimately determined by the amount of cash flow the business is expected to generate and by the amount of risk of those cash flows occurring. Every review item described in this template is intended to be used to help prospective investors develop a sense of expectations regarding a target business' ability to generate cash flows and to sharpen the understanding of the degree of risk to which those cash flows are subject.
M&A Integration Risk Impact/Mitigation Template
Risk: Agreement delayed / production dates push into busy season
Potential Impact: Integration work competing with regular work at busiest time of the year for sales, production, and fulfillment.
Mitigation Plan: Make decision on transferring production into 2022 and fulfill all else from west coast
Potential Cost Impact: Rent costs for Company A, delayed realization of production efficiencies ...
What Should You Do When Synergy Estimates Are Inflated?
"Map synergy activities to integration work streams. You may find the synergies are not tied to a work stream and accountabilities are not assigned. Verify responsibility, timing, amounts, and CTA ... Review gaps with senior management. Bad news never gets better with age ..."
What Questions Should You Ask to Determine Performance Management Risk?
Differences in performance management between two companies can cause conflict and harsh feelings. Questions to assess this risk:
- Is there a standardized performance management program?
- How often are employees evaluated (e.g., monthly, quarterly, annually)?
- What are the rewards for exceptional performance? Consequences for poor performance? ...
What Are Critical IT Day One Activities and Risks?
"New payroll processing, redirection of legacy phone numbers, conversion of sales and customer support processes, conversion of legacy email systems, ...
The success of Day 1 often rests on having a Rapid Response team of IT professional available to address risks and issues ..."
If IT is already running at full capacity before the integration, the additional work can be overwhelming."