One of the most crucial aspects of an effective merger acquisition is the integration phase. Often overlooked by companies until it is too late, acquisition integration can be the difference between a successful and unsuccessful the deal. If the objective is capital, cost or revenue synergies the process of integrating acquisitions can be an enormous undertaking and requires dedicated time to complete efficiently.
Many companies fail to realize the anticipated financial gains of a merger as a result of poor M&A http://www.virtualdataroomservices.info/what-is-deal-flow-management/ integration planning and execution. The main reason for this is the lack of alignment and commitment among the leadership team, which facilitates integration processes. The first step is to find individuals who have the passion and skills to successfully lead integration initiatives. This includes the M&A team, as well as all the functional teams involved, like finance, human resources, operations etc.
Another crucial aspect of M&A integration is to establish clear tracking mechanisms that connect the process to the P&L. This requires establishing clear KPIs that take into account the target company’s business model not just the acquirer’s. This ensures that the right measures are being tracked and appropriate targets are set.
A final suggestion is to involve an integration director as soon as you can. This could be done as part of the diligence process. It will maximize the value of the target by identifying synergies that aren’t being realized. An effective integration director will be able to spot opportunities prior to the deal closes, and assist in ensuring they are properly reflected in the target’s valuation.
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