Realising the anticipated synergies that underpin an acquisition and successfully managing the integration risks can be a challenge following a merger or acquisition.
There are several key steps to successfully integrate newly acquired businesses. These steps should form the backbone of the integration team’s approach to integrating the operational and financial functions of the business.
Focus on priority initiatives
Business as usual workload can distract management from identifying and prioritising certain integration activities, sources of value capture, value creation and value leakage. Resources must then be identified and allocated based on:
- potential financial impact;
- likelihood of success; and
- critical timeline requirements.
Plan for the integration and critical ’Day One‘ tasks
Critical ’Day One‘ tasks must be immediately identified and a plan developed to deliver these tasks before longer term integration planning is commenced. This plan should commence prior to transaction signing. Whilst identifying long lead time items, the plan should focus on putting in place all activities which are required to be operational on Day One.
Communication across all stakeholder groups is paramount
Communications with all stakeholder groups should commence early and continue on a regular frequency with a consistent message. Every integration team should have an internal or external (or both) communications representative. An integration can derail without great communication.
These communications should address the concerns of each stakeholder group and include the transaction rationale, the timing of key milestones and further work required to successfully integrate the business being acquired. A good plan will address the following groups at a minimum: employees, customers, investors, suppliers, and the market (public).
Establish integration leadership and integration teams
The organisational structure and operating model of the integration process must be established early and the early identification of key roles and leadership positions in the integration is critical to ensure accountability. Integration teams should be identified which will be responsible for key work streams and report through to integration leadership and steering committee.
The steps identified above should be considered early in the planning phase to greatly contribute to successfully integrating a newly acquired businesses.