1. Execute with confidence
Post-merger integration (PMI) is a fundamental stage in realizing the value of an M&A deal. It is a complex process requiring careful planning and swift action while simultaneously maintaining core business activities. A successful post-merger integration typically requires changes in a company’s business operations, people, processes, culture and structure. Failure to properly manage the process can result in missed targets, loss of key people, inadequate performance in daily operations, and ultimately, the failure of the merger to achieve the desired results.
2. Customize, but Systematize
There is no one-size fits all approach to a successful PMI process. However a focus on the strategic objectives of the deal and the identification and capturing of cost-saving synergies are keys to maximizing deal value. A Corporate Development solution that supports a systematized approach to PMI management can help maximize the value of a deal by keeping the Buyer laser-focused on the strategic objectives of the deal and helping to capture the synergies necessary to maximize deal value.
3. Consider Key Questions
A successful PMI process should be driven by the deal rationale and aligned to the strategy underlying the deal. Among the key questions that the Buyer should consider are:
- What is the underlying logic of the deal?
- Does the deal involve the Buyer absorbing the Target or the actual merging of the two entities?
- Which areas of the Buyer and Target are to be integrated and which are to remain standalone? Will the Buyer’s systems be adopted or a combination of the best from both entities?
- How soon post-deal do investors expect a return and are their expectations realistic given the challenges that lie ahead?
4. Save Time and Cost
Speed is of the essence in PMI. Investors typically expect to see synergies captured and cost savings realized within 12-24 months of deal close. The longer the PMI process is drawn out the more likely it is that potential synergies will be lost, cost savings and economies of scale will not be realized, management will become disillusioned, and key staff will leave. A SaaS solution with a purpose-built PMI module can accelerate the integration process by up to 40%, dramatically improving the prospects of a successful integration.
5. Measure Against Goals with Regular Reporting
As with any project, effective PMI management requires regular reporting, reviews against set goals, feedback and summaries of the results. With a platform that provides clear, concise reporting in real time — regardless of whether team members are in the same building or scattered across the globe — the Buyer can monitor all aspects of the integration process and take advantage of potential synergies.
For a comprehensive, step-by-step guide to a successful post-merger integration with example checklists, see Midaxo’s updated Complete Guide to Post-Merger Integration.