Poor post-deal integration practices are the most common reason for M&A failure. DealRoom helps companies avoid common mistakes and increase the value of their M&A deals through the post acquisition integration process.
The focus, the sequencing, the pace and the focus of post-deal integration should all be tailored to the objectives and sources that justified the deal. It may sound obvious, but many companies use generic best practices and off-the shelf plans that focus too much on processes and do not consider the unique aspects of their deal.
One company did, for instance. It recognized that R&D could provide a substantial amount of value, but since the primary product of the acquired company was in development, it chose to focus on great site growth rather by leveraging the capabilities and sales channels of the new company in a strategic fashion. They would then reevaluate the decision to fully integrate R&D over the long-term.
Another key practice among successful mergers is to hand the responsibility of capturing cost and revenue synergies to the line managers in the newly acquired company. This ensures that line executives are given the right incentives and responsibilities to drive tactical execution. It also makes it easier to monitor the progress towards goals in real time. We’ve also seen that it is beneficial to establish the capability to hold short sessions that are iterative, with specific deadlines and targets — so teams can adapt and update their goals and efforts as they move through the PMI cycle.