Integration is among the most crucial aspects of a merger acquisition. Integration of acquisitions is often ignored by companies, until it’s too late. It can determine the success or failure of a deal. Whether the goal is cost, capital or revenue synergies acquisition integration can be an enormous undertaking and requires dedicated time to complete efficiently.
A poor M&A planning and execution has resulted in many companies not reaping the financial benefits of merging. The main reason for this is the lack of commitment and alignment among the leadership team that aids integration processes. The first step is to identify and develop leaders who have the drive and skill to successfully manage integration efforts. This includes the M&A team, as well as all the functional teams involved, including finance and human resources, operations and more.
Implementing clear tracking mechanisms that link the M&A process to the P&L is another crucial element. This will help ensure that the right measures are being tracked and the appropriate targets set.
A final consideration is to engage an integration director as soon as you can. This can be done during the diligence process, and can help optimize the target’s value by identifying synergies not being realized. An experienced integration director will see these opportunities before the deal is closed and assist in ensuring they are properly reflected in the target’s valuation.
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