A successful merger and acquisition (M&A) is about more than the final purchasing of a company. Combining two businesses is like combining two families. It’s a complex process that can take some time to get used to and iron out the kinks.
We all know the saying, “If you fail to plan, you plan to fail.” That sentiment absolutely applies when integrating two companies, so make sure that you don’t go into this process unprepared. Creating a powerful strategy for integration involves every aspect of a business. It’s all about identifying challenges early on and understanding what factors need to be in place for the long term success of your merger.
We want to be the ones to help you navigate this process and make it a little bit easier. In this article, you’ll find six ways that your acquisition process can improve and help set you up for a seamless integration.
1. Start Earlier Than You Think
It might feel natural to focus on integration once the deal is signed and it's finally official.
That mindset is completely understandable. It makes sense why you’d want to focus on how to practically integrate people, processes, and brands once everything is 100% confirmed. There could even be concerns that the deal might not close, so why waste time and effort planning this integration anyway?
That’s a valid thing to worry about; however, many deals actually fail due to poor integration, so the earlier you start planning, the better!
2. Assemble the Integration Team
Appointing a team specifically tasked with maintaining a successful integration is very important. Their mission would be to create an integration plan for every aspect of the business. This includes timelines and due dates, roles and responsibilities within certain departments, and ongoing processes for review and adjustment.
This strategic group will focus on addressing the bigger issues as well as the more practical relationships between different aspects, from people and culture to operations and facilities.
3. Confidentiality and Data Room Set Up
Once the integration team is assembled, clarify what is expected in terms of confidentiality, both internally and when dealing with the other party. There will be a lot of sensitive data and confidential documents shared during this time.
Setting up a virtual data room (VDR) will become extremely important in this step. Reviewing and sharing documents within the VDR not only saves huge amounts of time and effort but also gives peace of mind that your sensitive information is secure.
4. Run Audits to Build a Foundation for Planning
There are several audits that will take place across the different departments during the due diligence process. The information shared in this phase can then be stored securely in the virtual data room.
Once you have data and information, it’s time to start asking questions such as:
- What value will the acquired products or services bring?
- Should those products and services be rebranded? If yes, should they change straight away, after a period of consolidation, or never?
- What changes to any websites and social media accounts will be needed and when?
- What impact will changes to websites have on search engine optimisation (SEO)? How can this be mitigated or capitalised on?
- Is there a duplication of tools and software or any additional burden on existing systems that will cause issues?
5. Consider Cultural Integration Early
The importance of creating a positive emotional connection amongst staff and customers is supported by research showing that around 50-60% of deals fail due to poor cultural integration.
There are tons of opportunities to take advantage of when merging two business cultures. There is so much room for growth and fantastic opportunities to work together with your new partners. The success of this cultural integration is incredibly pivotal to overall deal success that it is essential to plan early in the deal lifecycle.
6. Communicate the Vision
The next step in this transaction management process is to create a framework or vision for the acquisition and communicate regularly with stakeholders. Once the vision exists, don’t keep it a secret. Communicating the vision to stakeholders is critical for immediate buy-in on day one, but also for creating longer-term value.
In particular, for existing and acquired staff, change will be a little uncomfortable. It is quite likely that structural changes will result in redundancies. This uncertainty can lead to morale and productivity declining, as well as an increased level of resignations.
Having HR teams or consultants onboard to help communicate openly with the team will ensure that staff feel valued and important. While it may not be possible to give answers to all their questions straight away, regular updates and involvement will help them feel things are being done as fairly as possible.
In Conclusion
With so many challenges and moving parts in a deal, getting it across the finish line can feel like a major victory. However, whether the deal ultimately delivers on its promised value remains to be seen. One thing is certain—a well-thought-out, adaptable integration plan is a critical component of any successful M&A strategy.
