Integration is among the most important aspects of an acquisition merger. Acquisition integration is often not considered by companies until it’s too late. It can be the difference between a successful and unsuccessful deal. No matter what the objective is, whether it’s capital, cost, or revenue synergies, acquisition integration is an enormous undertaking and requires a dedicated time to complete efficiently.
Many companies fail to realize the anticipated financial gains of a merger because of poor M&A integration planning and execution. The most common reason is a lack of commitment and alignment in the leadership team in facilitating integration processes. The first step is to identify and raise leaders with the drive and experience to manage integration efforts. This includes the M&A team as well as all the functional teams involved, including finance and human resources, operations etc.
Another important aspect of M&A integration is to set up clear tracking mechanisms that link the process to the P&L. This involves establishing clear KPIs that incorporate the target company’s business model, not just the acquirer’s. This ensures that only the right measures are tracked and the appropriate goals are set.
An integration director should be involved as soon as is possible. This could be part of the diligence process and can maximize the value of the target by identifying synergies not being realized. An experienced integration director can identify these opportunities and ensure that they are included in the value of the target.