Merger Acquisition Integration Considerations

One of the most crucial aspects of a successful merger acquisition is the integration phase. Integration of acquisitions is often ignored by companies until it’s too late. It could be the difference in a deal. It doesn’t matter if the goal is cost, capital, or revenue synergies, the process of integrating acquisitions can be an enormous undertaking that requires time and effort to complete effectively.

A lack of M&A planning and execution has led to numerous companies not gaining the financial advantages of the merger. The biggest reason is a lack of commitment and alignment within the leadership team in facilitating integration processes. The first step is to identify and elevate leaders with the motivation and experience to manage integration efforts. This includes the M&A leadership team as well as the functional teams involved in the process such as human resources, finance operations, human resources, and many more.

Another key element of M&A integration is the implementation of clear tracking mechanisms that connect the process to the P&L. This means setting specific KPIs that reflect the target company’s business model, not just the acquirer’s. This will help ensure that the correct measures are being tracked and the appropriate targets set.

A final suggestion is to involve an integration director as soon as is possible. This can be done as part of the diligence process and can maximize the value of the target by identifying synergies that are not being realized. An effective integration director will identify these opportunities before the deal is closed and aid in ensuring that they are taken into account in the target’s value.

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