4 tips for successfully integrating an acquisition target
In any merger or acquisition (M&A), it is essential to have a well-defined, achievable and realistic desired outcome. This desired outcome must take into account the culture of both the acquiring and the acquired company, as well as the overall strategic objectives of the deal. Here are a few tips on how to define the desired outcome in an M&A target integration.
What is post-acquisition integration?
Post-acquisition integration (or Post-Merger Integration, PMI) refers to all the actions taken after closing to bring the acquiring company and the target together: aligning culture and teams, processes, information systems, offerings and brands. This is the stage where the value of the deal is created — or destroyed. Before taking action, you need to define a clear desired outcome: that is the purpose of the 4 tips below.
4 tips for defining the desired outcome
Assess cultural fit.
The first step in defining the desired outcome is to assess the cultural fit between the acquiring and acquired companies. Do they share similar values? Do they have compatible working styles? If not, what measures can be taken to ensure the cultures are compatible?
Define the overall strategy.
The next step is to define the overall strategy of the M&A deal. What are the objectives of the deal? What value will be created? How will that value be realised? Once the overall strategy is defined, it will be easier to create specific goals and objectives for the M&A target integration.
Create specific goals and objectives.
Once the overall strategy is defined, it is time to create specific goals and objectives for the M&A target integration. These goals and objectives must be SMART: Specific, Measurable, Achievable, Realistic and Time-bound. They must also be aligned with the overall strategy. For example, if the objective is to increase market share, a specific objective could be to increase market share by 2% within 12 months of closing the deal.
Determine who is responsible for each goal/objective.
Once the goals and objectives are defined, it is important to determine who will be responsible for each one. This will ensure that there is accountability and that each goal/objective receives the appropriate attention.
The 100-day integration plan
Once the desired outcome is defined, execution is decided in the first few months. A plan structured in three phases secures value creation and limits the loss of talent and customers.
Stabilise
Integration governance, internal communication, securing key talent and strategic customers, listening to the teams of both entities.
Align
Harmonising processes, information systems and offerings; first "quick wins" of synergies to build shared momentum.
Accelerate
Rolling out cost and revenue synergies, tracking SMART objectives, adjustments and a medium-term roadmap.
Conclusion:
Defining the desired outcome in a merger or acquisition target integration is essential to ensure the success of the deal. By assessing cultural fit, defining the overall strategy, creating specific goals and objectives and determining who is responsible for each goal/objective, you can increase your chances of achieving a positive outcome.
Frequently asked questions about post-acquisition integration
What is post-acquisition integration (PMI)?
It is the phase that follows the purchase of a company, during which the acquirer brings together the teams, cultures, processes, systems and offerings of both companies in order to deliver the synergies and value targeted by the deal.
How long does an integration take?
The first 100 days are decisive for stabilising and launching synergies, but a full integration generally spans 12 to 24 months depending on the size and complexity of the companies being brought together.
Why do so many mergers and acquisitions fail?
The most common causes are not financial but human and organisational: cultural incompatibility, departure of key talent, vague objectives, lack of clear accountability and overestimated synergies.
What is a 100-day integration plan?
It is an operational roadmap that sequences the priority actions of the first three months — governance, communication, process harmonisation and early quick wins — to set the pace for the entire integration.
Make your acquisition integration a success
From defining the desired outcome to the 100-day plan, our experts steer your integration to preserve and create value.
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