Closing an M&A deal is exciting, but it’s important to remember that it’s just the beginning and there is plenty of plan post-acquisition.  

Poor M&A integration can destroy months of hard work and strategic planning, so you must get it right! A strong post-merger strategy is crucial if you want the deal to live up to your expectations.

So what happens after a deal crosses the finish line? And what is needed to create an effective M&A integration strategy?

In this guide, we’ll tell you how to plan for post-acquisition integration and ensure that the deal lives up to its predicted value. 

What is post-merger integration? 

Post-merger integration, also known as post-acquisition integration and M&A integration, is the final step in the M&A process. It involves bringing two or more companies together and aligning processes and procedures, with the aim of maximising synergies and value.

Why is post-merger integration important? 

Did you know that between 70% and 90% of M&A deals fail? This is an alarmingly high figure and M&A deals should never be taken lightly. 

A survey conducted by McKinsey found that even when companies felt they were prepared to acquire a company, around 1 in 6 dealmakers still felt they were insufficiently prepared for integration.

Post-merger integration helps companies plan for future success and maximise the value of transactions. McKinsey found that acquirers who do M&A integration well achieve growth that is 6-12% higher than those that don’t. 

When implemented correctly, a post-merger integration strategy can help companies aim higher, achieve more, and realise post-acquisition synergies faster. 

How do I create an effective M&A integration strategy? 

Follow these key steps to create a strong post-merger integration strategy that will keep your team on track and enable value creation.

Step 1: Form your integration team 

A successful M&A integration needs a strong, motivated and unified team. Select skilled employees and appoint clear integration leaders from both companies. 

Step 2: Create your integration strategy

You must have a detailed integration strategy with clearly defined goals and objectives. Hold a kick-off meeting with your team to discuss your vision and determine the value drivers and guiding principles of the deal that supports that vision.

Step 3: Organise M&A integration activities 

Post-acquisition integration involves a wide variety of tasks and activities. This includes human resources, legal, finance, technology, sales, facilities management, and manufacturing. 

You can use a post-acquisition integration plan template to organise activities into functional categories. This will make it easier to monitor key processes throughout the integration process. 

Step 4: Maintain momentum 

Set your M&A integration team clear deadlines and strive to maintain momentum throughout the integration process. Distractions can lead to delays and lost opportunities, so you must keep your team focused. 

Step 5: Set clear exit criteria 

Exit criteria will give your M&A integration team clear goals to work towards, letting them know when integration is officially complete. Setting clear exit criteria will give your integration leaders a framework for decision-making. It will also motivate your team by telling them what they must accomplish and by when. 

You should customise your exit criteria to different M&A integration activities and departments such as human resources, legal, marketing, and so on. Allow each integration team to determine suitable exit criteria.

Tips for successful post-acquisition integration 

• Start planning M&A integration early: Post-acquisition is a complex process and you should start planning for value creation from day one. Re-assess your M&A integration goals regularly and adjust them when necessary. 

• Support your post-acquisition integration team: Working in an M&A integration demands a high workload and the role can be stressful. You must support your team and be aware of the signs of burnout to avoid losing top talent. 

• Prioritise communication: Good communication is a key component of an effective M&A integration strategy. Encourage open communication among your team and establish clear and accessible communication channels. 

• Leverage M&A tools and software: You can use a platform like DealRoom to centralise all communication, tasks, and integration documents in one place. This will align your M&A integration team on priorities and improve collaboration and efficiency.

• Use a post-merger integration checklist: A post-merger integration checklist will keep your team on track and help them prepare for the merger.

• Hire an M&A integration consultant: Seeking the advice of an M&A advisor is a good solution if you lack M&A integration experience. A consultant will help you identify the best areas for synergy and ensure minimal disruption to your operations. 

Tip: Browsing an M&A advisor directory is the easiest way to find an affordable advisor that suits your needs and goals. 

Key takeaways 

Post-acquisition integration can be a long and challenging process. If you’re struggling, you’re not alone! The secret to successful post-merger integration is to start planning early, follow your integration strategy closely, and stay focused on the strategic goals and objectives of the deal. 

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Running a business and deciding to sell or acquire another can feel like having two full-time jobs. While some business owners thrive on the excitement of buying and selling on their own, many, including myself, benefit from collaborating with experts who bring more sector specific experience. However, it’s important to note that working with M&A advisors is not a one-size-fits-all solution. Hence why we built our advanced portal and Find An Advisor programme to empower you with the tools, education and relevant expert support to help you navigate the end-to-end process and secure a higher valuation.

Check out the free calculator on our pricing page, which shows you the six to seven figures in additional share value Foundy can provide your business.

No matter where you are on your business journey, connect with Foundy to access the resources needed for a smoother acquisition or sale process.