Post Merger Integration

Guide to Post Merger Integration

An M&A Consulting firm can put you on the right track for success
By M. Krasniak

Post merger integration is the primary reason mergers fail. You need to consider a variety of factors prior to the actual merger to minimize the risks of merger failure. You must integrate computer systems and corporate cultures need to mesh successfully, to form one cohesive group of employees.

Successful joining of the firms requires a post merger integration plan. While acquisitions are part of the culture at some firms, most firms need assistance in the development and execution of this. Merger and acquisition consultants can help with all levels of the deal, including the integration portion. To ensure the merger will be successful, follow these steps for post-merger integration: To ensure the merger will be successful, follow these steps for post-merger integration:

1. Find and hire an M&A consultant.

2. Perform due diligence.

3. Implement the post merger integration plan.

Action Steps

The best contacts and resources to help you get it done

Hire M&A consultants to assist in the merger process There are numerous firms in the M&A consulting field, and they tend to specialize by client size and industry. For very large firms, a likely M&A consultant is one of the big investment banks like Merrill Lynch or Goldman Sachs. Middle market firms typically seek smaller M&A consultants.

I recommend:  You can find merger and acquisition consultants in most large cities. In this field, personal experience and a solid track record is crucial. You can conduct a Google search for “M&A consultants” to find potential firms in your area. One potential consultant is PriceWaterhouseCoopers, which offers merger and acquisition consulting services.

Execute the merger correctly by valuing the target and ensuring a good fit The most important part of the merger is identifying an appropriate counterpart, or target, for the merger. The M&A consultant is important in identifying potential targets. Another key element is known as due diligence, or analyzing the target's financial situation.

I recommend:  Deloitte & Touche offers many tips on analyzing the target firm. This goes beyond simple analysis as to the financial health of the target. It is also important that the target is a good fit for the acquiring firm, so that there will be positive synergy as a result of the merger.

Follow through with the post merger integration plan Once you identify the target firm, it's crucial to develop a vision as to what the new firm will be. This requires several meetings between the two management teams. The acquisition consultant team can be helpful in this area as well.

I recommend:  Strategy + Business offers a model of a post integration plan, including developing a vision for the new firm. Use their model as a stepping stone to develop your own integration plan.

Tips & Tactics

Helpful advice for making the most of this Guide

• Together with your Merger and Acquisition advisors, conduct meetings with the employees of both firms prior to the merger transaction, and begin aligning the two firms' corporate cultures early on. This will ease the transition period that occurs after the deal is completed.