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I work in Business Services as a Senior Consultant in M&A Integration. One thing I have seen is the minimum interest in Integration. In fact most clients (Shareholders) will spend hours focusing on pre-deal (Due diligence etc) to finalise a deal but will spend little to no proper time in thinking at the pre-deal level about their Integration. This is flabbergasting knowing that more than 70% of deals fail at the integration level. Post Merger Integration should not be left at the last minute but instead should be already prepared and though off at the pre-deal level. A focus on how to integrate every component of a business early on in the deal will allow companies to think deeper about their due diligence and valuation of potential synergies. I think this would make sure they have all the knowledge they need to create the most efficient plan with the best results.
I’ve been on both sides of several M&A efforts and IMHO integration is by far the most important factor in the success of failure of such an effort. We acquired a company in February of 2020 and had no plan to integrate it. Partially because of regional differences (we are U.S. based and the company is in Europe) and COVID added additional complexity. The performance of the company has suffered and no one knows how to fix it. On the other hand we just acquired a 2nd European company with a clear integration plan and it’s been a tremendous success!
Part of the problem might be that integration is not as sexy as the planning and negotiation part. Much fewer dinners and a lot more work.
Can’t agree more with the above thoughts of both of you. It is indeed shocking and frustrating to see this happen in most of the deals, small or big, public or private, start-up or established ones. I firmly believe this is where the quality of leadership and project management skills of the acquiring company are put to a stern test and well exposed when they are totally found wanting, be it due to lack of intent or sheerly due to inadequacies & incompetencies. Execution is totally a different cup of tea from planning and the toughest part. Knowing this is one thing but proactively working on this to overcome this execution challenge (by building capabilities and be mission-driven to succeed is totally something else !!!
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