The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level

The Complete Guide to Mergers and Acquisitions is the ultimate handbook for planning and managing post-merger integration. Packed full of “how to” guidance, tools, templates and resources that have been put to the test on numerous due diligence and integration efforts around the world, The Complete Guide to Mergers and Acquisitions has been the go-to guide for firms seeking to maximize the value of their deals since the release of the first edition in 1999.

Poor integration management virtually ensures that a merger or acquisition will fail to meet financial and strategic goals. The Complete Guide to Mergers and Acquisitions provides the information that enables firms to quickly and prudently capture projected cost and revenue synergies, and to move the combined organization forward. The book addresses strategic deal considerations, due diligence, integration management, people dynamics and cultural integration, common integration mistakes, communications strategies, and provides actionable steps toward creating measurable, positive results throughout the integration process. The updated third edition contains new information and tools to help firms in any industry manage deals of all sizes, including:

• Results of The State of M&A Integration Effectiveness Survey, 2014
• A new chapter on the M&A process deal stages, with an expanded Deal Flow Model
• Findings of substantial M&A research from various studies in multiple industries and organizations, supporting the concepts presented throughout the book
• New and revised tools and templates for due diligence, integration, and results measurement and reporting
• New case examples of recent transactions
• Highlighted ‘Key Principles’ throughout each chapter
• A summary of key points at the end of each chapter
• Discussion questions addressing the key themes of each chapter
• A ‘rapid assessment’ diagnostic regarding the key elements of each chapter, which can be completed for any organization
• A revised chapter on taking your M&A game to the next level – essential requirements for building M&A capabilities into a consistently successful enterprise competency

Merger and acquisition activity across the globe continues to grow, and is also playing a major role in the development of expanding markets. A well-managed integration effort is essential to success, and failure means a tremendous waste in terms of time and money, as well as the rapid destruction of shareholder value. The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level, Third Edition is an invaluable resource to guide firms in managing M&A integration and maximize the value of their deals.

Table of Contents

List of Exhibits xiii

Foreword, by Jim Jeffries, cofounder and chairman, M&A Leadership Council xvii

Preface xxiii

The Authors xxix

ONE Integration: Where Deal Value Is Realized 1

Buyer Beware! 2

Factors Contributing to Poor M&A Results 4

Deal Strategy—Then and Now 6

Strategic Deal Rationale: The Eight Cs 8

Serial Acquisitions as a Growth Strategy 9

Integrations Exist on a Continuum 10

Ten Key Recommendations for Maximizing Deal Value 15

Develop a Sustained M&A Capability 18

Be Sure to Avoid the Killer Phrases 19

Chapter Summary 21

Discussion Questions 23

Rapid Assessment Tool 23

TWO The Deal Flow Model: Pitfalls and Best Practices Throughout the M&A Process 25

The Deal Flow Model 27

Chapter Summary 53

Discussion Questions 54

Rapid Assessment Tool 54

THREE Integration Begins with Due Diligence 57

Due Diligence Should Prevent Surprises 58

Due Diligence Is an Iterative Process 63

Managing Due Diligence as a Rapid Results Project 65

Target or Partner Firm Participation in Due Diligence 67

Prioritize Synergies According to Their Impacts on Deal Value 68

Due Diligence and Integration Strategy 70

Due Diligence and Integration Risk Factors 70

Due Diligence and Organizational Culture 73

Due Diligence and Human Resources 79

Due Diligence and Human Capital 83

Chapter Summary 84

Discussion Questions 85

Rapid Assessment Tool 86

FOUR Welcome to the Big Leagues of Change Management 89

Organizational Dynamics Created by Mergers and Acquisitions 90

Seven Fundamentals of M&A Change Management 92

Chapter Summary 107

Discussion Questions 108

Rapid Assessment Tool 109

F I V E The Merger Integration Work Streams Model 111

The Merger Integration Work Streams Model 113

Deploying the Model 124

Chapter Summary 130

Discussion Questions 130

Rapid Assessment Tool 131

S I X Organizing, Involving, and Coordinating Integration Task Forces 133

Establishing the Integration Infrastructure 134

Staffing the Integration Project Team 141

Launching the Planning Process 142

Chapter Summary 164

Discussion Questions 165

Rapid Assessment Tool 166

SEVEN Waging the Communications Campaign 169

Great Ideas and Game Winners 188

M&A Communications: Lessons Learned 191

Chapter Summary 192

Discussion Questions 193

Rapid Assessment Tool 194

E I G H T Don’t Let Them Jump Ship: Retaining and Re-recruiting Your Key People 197

“Me” Issues Dominate 198

Examples of Effective Retention and Re-recruitment 199

Identifying Key Talent 201

Understanding What Motivates People 202

Developing and Executing a Retention and Re-recruitment Action Plan 206

Retention and Re-recruitment Options and Considerations 213

Chapter Summary 215

Discussion Questions 215

Rapid Assessment Tool 216

NINE Setting the Organization Cures Many Ills: Structure and Staffing Decisions 219

Common Problems 221

Ten Principles 225

Fair Processes 240

Staffing Process Models 242

Chapter Summary 253

Discussion Questions 254

Rapid Assessment Tool 255

TEN Tracking Success: Merger Measurement Systems 259

Integration Measures 262

Chapter Summary 290

Discussion Questions 291

Rapid Assessment Tool 292

ELEVEN “But They’re So Different”: Cultural Integration 295

The Impact of Culture on NewCo Performance 296

Operationalizing and Managing Cultural Integration 297

Discovering, Designing, and Delivering Cultural Integration 300

Answering Key Questions 304

Sticking to the Cultural Integration Implementation Plan 307

Continuously Manage NewCo Culture 308

Chapter Summary 309

Discussion Questions 310

Rapid Assessment Tool 311

TWELVE Human Capital Integration and the Human Resources Function 313

The “Making Strategy Work” Model 316

Case Studies in Human Capital–Related Integration 319

Chapter Summary 327

Discussion Questions 328

Rapid Assessment Tool 329

THIRTEEN Merger Repair 331

Clear Symptoms 336

Merger Repair Rapid Assessment 338

Two Tracks of Merger Repair 339

Chapter Summary 344

Discussion Questions 345

Rapid Assessment Tool 345

FOURTEEN Taking Your M&A Game to the Next Level 347

Are You Getting Better at M&A? 347

Failing to Protect Your Investment 348

Beware the “Not Invented Here” Syndrome 349

Don’t Fumble at the Goal Line 350

Enterprise-Level M&A Competency Model 351

How Does Your Integration Stack Up? 356

Does It Work? 357

Chapter Summary 360

Discussion Questions 360

Rapid Assessment Tool 361

Resource A: Sample Task Force Charter 365

Resource B: Integration Planning Template 373

Resource C: Executive Summary—The State of M&A Integration

Effectiveness Survey, 2014 393

References 417

Index 429