The deal could be completed after M&A transactions are concluded, but if companies do not take the proper steps to integrate following the closing of the deal, they could lose out on significant value. The most time-consuming and challenging M&A process is integration of mergers and acquisitions. A efficient team as well as clear communication and a solid plan are essential for the success.
Pre-integration planning can eliminate many of the problems that companies confront during integration. For instance when integrating systems, it is important to take careful consideration of ownership of data, process synchronization, and other issues. Innovative IT solutions are required to allow the new company to benefit quickly. The ideal time to begin planning is during due diligence and then the PMI framework should be finalized prior to closing the deal. The key to PMI success is to determine and track key integration milestones in order to monitor progress and concentrate on the end goal of the transaction.
A common mistake made in integration is to incorporate too much, which can destroy value by fundamentally altering aspects of the acquired company that made it attractive in the first place. Acquisition companies often underestimate the amount of time needed to successfully integrate a newly acquired company.
Another mistake that is common is not evaluating culture and working norms in sufficient detail. Conflicts can result if, for instance, the cultures of two different organizations are completely different. To avoid these issues the buyer could begin the evaluation at the due diligence phase by inviting key individuals from the target company to examine their work habits and the culture. This is a useful method to determine the kind of integration strategy that will be required following the deal is concluded.
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