DealRoom – Best Practices for Post-Merger Acquisition Integration

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M&A deals that fail most often due to poor post-deal integration. DealRoom assists companies avoid common mistakes and increase the value of their M&A deals through the post-acquisition integration process.

The approach, sequence and speed of integration after the deal must be specifically designed to serve the objectives and value-added sources that led to the transaction in the first in the first. It may sound obvious but we have seen many businesses fall back on off-the shelf plans and generic best practices that overemphasize process and fail to consider the unique aspects of their deal.

One company, for example recognized that R&D was a primary source of value when they acquired, but because the core product of the acquired firm was still in development, they chose to not take advantage of the cost synergies and concentrate on growth by making use of the new company’s sales channels and capabilities in a more strategic way. In the long term, they would reevaluate whether to fully integrate R&D.

Another crucial practice that is common to successful mergers of a larger scale is to transfer the responsibility for capturing cost and revenue synergies to the line managers within the acquired business. This ensures that line executives receive the right rewards and responsibilities for directing the tactical execution. It also makes it easier to track the progress made towards goals in real-time. We’ve observed that it’s helpful to create the capability to hold short, meetings that are iterative, with clear targets and deadlines, so teams can adjust their goals and activities as they progress through PMI cycles.