Mergers and acquisitions are labor-intensive and multi-stage processes, after which there is always the integration process, which is not at all easier and requires increased interconnection with another company. According to statistics, more than 40% of M&A deals are derailed exactly at the stage of integration, and to avoid this they require a certain set of resources and assets. You also need a solid integration plan, and in this article, we’ll tell you what you need to do to develop the right integration plan.
Introduction and M&A Integration Strategies
The first thing you need to do as an acquirer is to determine the real value and guidelines for the deal. This is so that you can understand the real priorities that will further help in the agreement of the integration program. M&A managers will often have to deal with the top management of the selling company to determine the real value and cost of the deal. They will also need to interact with the teams on the deal to better understand its context and assumption model. Later, the deal manager should present all the information received to the steering committee to more easily determine the strategy of degree and speed of integration.
M&A integration program and governance
To better understand the legal principles of the deal, you will need to consult with several lawyers, both inside and outside your company. This will also help managers be aware of all the risks and requirements, as well as come up with plans for dealing with certain situations.
In addition, it is very important to take care of the confidentiality of the integration and establish rules of exchange and communication between the parties. virtual data room italia can help you with this like no other. VDR provides an absolutely secure space for document storage and exchange, as well as collaboration, data rooms help companies in all phases of the transaction, including integration.
Set up the software, get up IMO, and start functional workflows
Integration managers and the steering committee should set up an office to manage integrations (IMO) so they can execute planning and integrations within their functions without hindrance while being flexible to adapt to changing business circumstances.
IMO also allows integration strategies to be defined, information to be shared, and integration guidelines to be followed. It is one of the three major components of the integration governance structure, along with functional workflows and the steering committee.
Functional charters and day one vision
Once the integration program has been decided, the IMO needs to work on creating the newly merged company, and determine what it takes to achieve it. The leader should direct the functional teams to define workflow charters.
These charters tell the roles and responsibilities of each workstream, key links to other functions, and an initial set of day one milestones.
The last steps of strategy development
So next, the following steps should be present in the development of your integration plan:
- Determining how the new organization will operate by developing an operating model for the combined company
- Coordinate the creation of a holistic integration work plan, a planning document created by each function, with integration milestones, objectives, timelines, owners, and interdependencies with other functions
- Realize your strategy by leveraging previously created work plans and other documents informed dashboards, and data analysis platforms
- Create deal value by embedding synergy goals into executive performance goals and making sure those goals are built into the annual budget process
- Don’t forget to monitor and manage change during this process and communication between parties