Consulting for Small to Medium size Industrial Products companies
Acquisition Integration
by Warren Martin, Founder on September 23rd, 2013

Excellent Integration key to acquisition success


Poorly done integration of an acquired company virtually guarantees disappointment, if not outright failure of the results expected by the acquiring company. Why do many companies get this wrong? Some of the reasons and solutions can be found in the following paragraphs.
I believe that the very first thing an acquiring company must do before concluding the purchase of another firm is to have a very detailed integration plan. As importantly, there must be a very strong leader of the integration with an intelligent and committed team working under the leader. The integration plan must cover every aspect of the acquisition. It is critical that the team be incented to integrate the acquisition with a very clear vision of the defined synergies in mind. Every function of the business must be addressed in the integration with a team member responsible. Timelines and milestones for completion must be defined. It is the integration team leader’s job to ensure that all milestones and completion times for tasks are met. Delays often result in difficult or unrecoverable failures that directly impact expected performance results. Regular team meetings should be held to monitor integration plan task completion and address problems. For the first several months after closing, these meetings should be weekly. After the team leader sees that integration is proceeding smoothly, meetings can go to monthly until integration is deemed completed.
The second important factor in a successful integration of an acquisition is getting the acquiring company’s leadership in place in the top executive positions such as CEO and CFO immediately. This should be planned and communicated before closing. If the acquired company’s leadership is leaving, proper severance packages should be negotiated so that the acquired company’s people know that the acquirer is fair and values people. Then leadership’s top job in the first three months after closing is to drive the new culture into the DNA of the acquired company. They must also make key personnel decisions on who will stay and who will need to move on to pursue other interests. A goal to get this done in the first 90 days should be undertaken to minimize the disruption and get on with the task of driving the primary synergies.
There are many other factors in a successful integration of an acquired company; however in my view, these are the two most important.


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