Inadequate post-deal integration procedures are the primary reason for try this out M&A failure. DealRoom helps companies avoid common pitfalls and maximize the value in their M&A transactions by assisting in the post-acquisition process.
The emphasis, sequence, and speed of integration after the deal should be explicitly tailored to serve the objectives and sources of value that prompted the transaction in the first place. That sounds obvious however, we see many companies rely on off the shelf plans and general best practices that overemphasize processes and ignore the distinctive elements of their deal.
One company, for instance recognized that R&D was a major source of value when they acquired however, as the core product of the acquired firm was still in development, they chose to not take advantage of the cost synergies, and instead focus on growth by making use of the new company’s sales channels and capabilities in a more strategic manner. In the future, they would reevaluate whether to fully integrate R&D.
Another important practice in successful larger mergers is to delegate responsibility for capturing cost and revenue synergies over to line managers within the acquired business. This ensures that line leaders receive the appropriate incentives and responsibilities to lead tactical execution. It is also easier to track progress towards goals in real-time. We’ve observed that it’s beneficial to build the capacity for brief meetings that are iterative, with clear targets and deadlines, so teams can align their goals and focus as they move through PMI cycles.