M&A deals that fail typically due to poor post-deal integration. DealRoom helps businesses avoid common pitfalls and maximize the value of their M&A transactions by assisting in the post-acquisition process.
The focus, the sequencing, the pace and the importance of post-deal integration should all be tailored to the objectives and sources that justified the deal. It may seem obvious, but many businesses rely on generic best practices and off the shelf plans that concentrate too much on process and overlook the specific aspects of their deal.
One company, for instance realized that R&D was the primary source of value when they acquired, but because the core product that was acquired by the acquired company was still in development, they decided to not take advantage of the cost synergies, and instead focus on growth by leveraging the company’s sales channels and capabilities in a more strategic way. In the future, they would reevaluate whether they wanted to fully integrate R&D.
Another key element of successful mergers of larger size is to assign the responsibility of capturing cost and revenue synergies onto line managers in the newly acquired company. This ensures that line managers have the right incentives and responsibilities for driving the tactical execution. It also makes it easier to track the progress made towards goals in real-time. We’ve also noticed that it can help to build in the capability to hold short sessions that are iterative, with a specific timeline and target — so teams can adjust and revise their goals and actions as they progress through the PMI cycle.
