When is the right time to start preparing for post-merger integration

This topic contains 15 replies, has 16 voices, and was last updated by  Mateusz Młynarczyk 8 months ago.

Viewing 15 posts - 1 through 15 (of 16 total)
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  • #62782

    Anirvan Sen
    Participant

    For any reasonable sized integration, a certain amount of preparation must be done prior to starting the process of integration. What is the right time to start the preparation

    #64624

    Qiyang Liang
    Participant

    The preparation should be done as early as possible.
    It could start at pre-deal stage where the team has certain hypothesis about how integration should be done.
    these hypothesis should then be tested and refined during the due diligence stage as the acquirer understands the target company better.

    a draft integration plan should be prepared post due diligence, with the involvement of all relevant functional and senior management team

    #64836

    Marina Manakova
    Participant

    Based on my experience, best option – to start the preparation together or right after Operation Due Diligence completion. You can mobilize a Project Team and plan DAY 1 activities even earlier.

    #65638

    Carli Luhrs
    Participant

    To institute the PMI plan can start as early as when the letter of intent is signed. At this point, there’s a level of commitment on both sides of the deal table. Starting to craft a PMI plan at this stage allows enough time to ensure that financial and strategic objectives align with the tactical implementation plans.

    #65688

    René Geltink
    Participant

    Right at the start of the process. Since post merger preparations often reveal specifics cross domains, that might otherwise be overlooked. This can then be an input for both a (changed) scope and/or (changed) negotiation perspective

    #68091

    Alexander Eck
    Participant

    In summary everyone here seems to agree that efforts should start right away and continue the more information is being collected along the way. I would like to point out that PMI is not only a process but also a role. If there is nobody assigned to the success of an integration, it can’t be successful.

    #68253

    Tobias Rohrbach
    Participant

    It has to start in the due diligence – as a buyer you have to include the cost besides the deal price for reaching your planend and expected objective. So, only if the PMI is proper planned, you can rate the probability of reaching your objective.

    #70848

    Fernando
    Participant

    PMI preparation should start on day 1. Think of a merger like marriage. You start dating, to get to know the person (due diligence), and after proper due diligence you propose the merger (engagement), then prepare the more detailed plans necessary to for closing (wedding).

    If we start thinking about PMI after “getting engaged,” it will be more costly to back out of the deal. More time, effort, and resources will have gone into a venture which wasn’t meant to work from the get-go because of incompatible corporate cultures or other issues. A deal should be more than financials (“looks”), we need to look deeper into management styles, corporate philosophies, and human resources (“personality”) to analyze if a merger will create the desired outcomes.

    #75360

    Cesar Otero Lucas
    Participant

    In my opinion, during the DD process it is time to plan how PMI is going to be done. It is complementary to the DD information, because by visualizing how it has to be managed, we can discover hidden issues as, for instance, the relationship with stakeholders, as unions or customers.

    #75444

    Seun Yakub
    Participant

    I think this is a key part of the preliminary consideration of a deal!

    #81910

    Celine Bolard
    Participant

    Hi
    My analysis is that a company should have an iterative process of for preparing the post merger integration.
    1. when the letter of intention is signed, to start looking for detailed information about the target and start building a macro analysis
    2. after the due diligence when more detailed information is gathered should be the second phasis to have a more precise view on the integration
    3. at signing, to start preparing day 1 and the plan for 3 months
    4. at closing, finalizing the integration plan with the 2 teams and communicate

    #81924

    Enrique Blanco
    Participant

    For sure during the DD process there is still very limited information to prepare in detail the PMI. Nevertheless, you can clearly guess what type of integration you’d be facing in case of securing the operation and how capital intensive it will consist of.
    Therefore, scaling your future integration teams prior analysis of your internal capabilities is a must during the DD process.

    #81975

    The right time to start preparing the post-merger integration is immediately after the board of diectors approves the acquisition or merger with a target company.
    The PMI should be part of the general thinking and design of the deal as it might poses challenges that need to be considered well in advance and might inlfuence the decision making process and the deal itself.
    The targets organisation, number of employees, culture, benefits, education, age, etc are certainly topics that need to be thought and considered well in advance.

    #82119

    Anjeli Narine
    Participant

    It should be considered at the earliest possible moment. We have seen that integration is a significant determinant of “success” of the acquisition. The cost of effecting integration and post-integration cultural and organizational fit are essential considerations in whether a deal should be pursued. I believe that thought should be given to the likelihood of integration, the cost of integration and integration strategies as early as reviewing Teasers and CIMs.

    #82383

    Because regarding PMI you have a lot of information to process, you have to start as early as possible. At least when the letter of intent is signed.

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