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Early acquisition planning

So you finally made an acquisition.  Now what do you do?

In my experience, buyers and sellers have a “plan of sorts” to integrate the two businesses before closing. Yet they often fail to provide for any explicit connection between the deal-making process and the eventual integration of the two businesses. This disconnect may ultimately undermine an acquisition’s value and its perceived operational advantages. Both Buyer and Seller should require that there is a clear integration plan and designated manager who is responsible for managing the integration effort.

I know of no small business with a standing integration plan or team.  Owners seldom require that discussions on integration start early enough in the process. Those discussions are critical to avoid surprises later. The integration process has important implications for the due diligence, structuring of a deal and employee retention, all of which can look very different depending on whether the acquirer aims for full integration or plans to leave the target more or less untouched.

In conclusion, companies need to have a post deal learning process where employees can communicate key insights from the merger of the two companies, thereby enabling a future acquisition to be more successful. For example, they might hold workshops, analyzing each step in the acquisition process, documenting what has been learned and observed along the way, key lessons, the quality of the process and the business goals reached, employee reactions and document the observations for the future.

Good Luck

Steve Sink

Certified Business Intermediary

Merger and Acquisition Master Intermediary

ss@phxaffilaites.com

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