The document provides an integration framework for post-acquisition integration. It outlines key guiding principles such as getting the integration strategy right and designing the integration program around benefit realization. It describes an implementation structure with focus on the first 100 days to realize quick wins. The framework also details setting up an integration structure with a steering group, manager, and cross-functional teams to integrate corporate functions such as finance, HR, IT, and legal.
2. “There will be hunters and hunted, winners and
losers. What counts in global competition is the
right strategy and success!”
…….. Heinrich von Pierer
3. Post Acquisition
Integration – the what
• the phase, where the operations of the acquired entity are
merged with the Buyer’s existing operations.
• the phase where the results of the Buyer's M&A strategy, and
expectations for the closed deal, materialize.
4. Guiding principles for
acquisition integration
“Quick Win Synergies NOT captured in the first 12 months,
usually evaporate and are overshadowed by day-today
business”
5. Key Guiding principles for successful
post acquisition integration
Strategy • Get the Integration Strategy Right
• Design the integration program around
Program Design the benefit realisation
Program • Provide focus via outstanding program
Management management
• Manage the Risk to the business as
Risk Management well as the program
People & • Rapidly engage the people in both
Communication organisations
6. The Integration
Framework
“Companies spend their time pulling the deal off. They
often don’t put enough focus on the most important part,
the integration. The integration is the key to value. If you
don’t get the companies integrated, you will have paid too
much!”
7. Helicopter View – Integration Framework
Structure, Resources, Process & Tools
Integration of Corporate Functions
Transition to Line Responsibility
Review and Learning
8. Integration Implementation Structure
3 years
• cultural change,
• Optimum Benefit
12 to 18 months Realisation
• changes are
implemented
First 100 days • Quick wins are
realised
• “Takeover Period”
• decisions are made
Day 1 and priorities set
• first day after Change • organizational
of Ownership structure to be
finalized
9. Day 1 The First Day after Change of Ownership
Communication Operating Management Systems & Controls
Continuation of Financial & Revenue
Welcome letter of individual emails What continues a before
Reporting
New Managers What changes immediately Clear instructions, ready forms and
templates and time-table
What near-term changes are
How to contact and FAQs Temporary Management Systems &
expected and when
Controls IF Operational Structures
Where more information can be are not finalised
found
10. Day 1 - Operating Structures, Systems & Controls
• Early, should be part of the • Key Managers should not be • Top Level Structure is decided
Acquisition Process or Day 1 lost before or after the by Acquirers Leadership
Integration
• If MD is from acquired entity, • Operating - Many times
buyer should nominate their • If not met with all the key Operating Structure is Project
own CFO/Controller for managers prior to Day 1, use Owner/Steering Group
smooth Financial integration 100 days to decide • Statutory – if acquirer has an
entity in the same country,
legal merger to be considered
Agree on
Appointment of
Decision on Key Operating &
Managing
Managers Statutory
Director
Structures
• Similar type of Governance to • Who can approve documents • Consider possibility to
the Acquirer‟s entity – (sales orders, purchase physically consolidate
orders, employment contracts, locations
• Do‟s and Don‟ts etc.)
• New Hiring & Redundancies, • Estimate any renovations,
Salaries & Benefits • Delegations and approval moving, selling, buying of old
• Approval of Costs limits premises as part of the study
and agree upon
• Reports (Travels, Visits etc.)
• Investments & Funding
Agree on
Governance & Agree on Office
Authorising
Guidelines and Locations
Officers
11. First 100 Days - Integration Period Approach
Typical Target Benefit Realisation - 20%-30% of Total
Benefits. Realise Quick Wins
Verify Due Diligence Data, Gather Additional
Information, Prioritise, Change/create Plan, Implement
Setup Integration Team/s to Target all Key Corporate
Functions & Business Areas Integration
“Invest in Integration” Having or not having key full time
Integration Resources within Teams would mean
success or failure of an Integration Project. It should not
be „Business As Usual‟
12. Top Management Alignment – Joint Meeting/s
Everyone in management of the acquirer and acquired entities is to be
committed to the same goals and communicates the same message.
Discuss and agree on issues in series of meetings
including:
• History
• The Separate Companies‟ Pre-deal Strategies
• Choices to be made
• Markets
• Technology Trends
• Competition
• Future Strategy
• Company Values
• Value Creation Potentials
• Costs And Risks
• Company Goals
• Competences
• Size And Structure Of Entity To Fulfil The Strategy
• Integration Goals
• Process and Resources
13. Integration Budget
First estimates of integration costs should have been identified during the
transaction / purchase phase.
Integration Manager / team needs to review and refine these estimates
Cover at least the following…
1. Basic ICT infrastructure changes
2. Changes in company identity / branding
3. Legal and other costs to ensure compliance with local laws and the
buyer‟s standards
4. Costs to introduce buyer‟s risk management / insurance policies
5. Costs related to management changes (search fees, redundancy costs)
6. Integration Consultants/Advisor Costs (if applicable)
7. Travel/Accommodation for the Team during the integration period
8. Any other significant project-specific items need to be budgeted for.
14. Resources & Responsibilities
Integration owner / Manager
As in the transaction/purchase phase, the owner/sponsor is normally a
member of the Buyer's Management team.
The owner of the integration phase can be the same individual as in the
transaction/purchase phase.
15. Resources & Responsibilities
Integration Manager
Is the project manager. Should be appointed already during transaction /purchase phase.
As the reality on the ground, at the local market level, may well differ from the global view, it should
be decided whether a local Integration Manager (reporting to the global Integration Manager) needs
to be appointed to work more closely with a particular market or country operation.
Role
• Main responsibility for day-to-day management of the integration effort
• Integration management work is hard to perform as a part-time activity, so the Buyer's
management needs to carefully consider the importance of the task and allocate the time
necessary
• Always made a “project assignment” with limited duration (typically from 3 months up to 18
months)
16. Resources & Responsibilities
Integration Manager
Responsibilities
• During Due Diligence, to become acquainted with the Target‟s business
• Preparation and modification of the integration plan
• Work with team, HR and communications in order to get a positive start of integration
• Defining goals, resources and timetables for the integration project
• Bringing integration teams together
• Planning and running the kick-off meeting & follow-up meetings
• Guide and support the integration teams
• Coach and assist in problem solving
• Reporting and defining instructions and goals to/from the Integration Steering Group
• Monitor that the teams meet expectations in the given allotted (SPEED!)
• Make sure non-negotiable issues are understood and implemented
• Help personnel adjust to change
• Assist in identifying and reducing cultural barriers
• Ensure the tools and information sharing between the teams
• Develop learning methods
• Prepare reporting and reviews
• Hold summary discussions
17. Resources & Responsibilities
Integration Steering Group
The Integration Steering Group is the governing board of the integration phase.
Role / Members
• Supervises the Integration Project Manager‟s and the integration team‟s work
• Should meet at least monthly
• Representatives from both Buyer‟s and the acquired entity
• May include individuals with specific expertise relevant to the project
• Normally 3-7 individuals to maximize the effectiveness of team work
Responsibilities
• Selects the members of the Integration team (based on Integration Project Manager‟s
proposal)
• Specifies the measures, goals/targets and reporting instructions for the Integration team
• Supervises and supports the Integration team‟s work
• Makes decisions on the more significant issues
• Monitors the project costs vs. budget and approves the expenses incurred by the integration
teams
18. Resources & Responsibilities
Integration Stream Team Manager
The members of the core team, often the same as the team / stream managers, are responsible
for identifying the issues to be addressed and developing the integration plan.
Best results can be achieved when team members are experienced individuals from the Buyer
and the acquired entity. In the case of integrating support functions (HR, ICT, finance and legal),
it is recommended to recruit members who have previous experience of integration projects.
The key Integration team manager tasks :
• Being the team builder
• Introducing the team members to one another
• Seeing that the team members have all information/tools needed for the task
• Clarifying the goals/targets/times tables/reporting etc.
• Ensuring everyone in the team understands the goals the same way and is committed
• Manage and encourage team to progress
• Sees that the team keeps the schedules and prepares reports
• Being the source of assistance and guidance, when needed
19. Resources & Responsibilities
Market / country integration
Operative :When integration covers multiple countries, it is important to clarify which global
guidelines, rules and tasks can be applied at the local level, and where country-specific exceptions
need to be made.
Statutory:
• Level of integration – retain separate legal entities or merge
• Ordering, invoicing etc., to be made under which company name.
Coach / facilitator
If the Buyer has limited integration experience or none, an integration coach can be appointed to
assist the Integration Steering Group and/or Integration Manager. The coach or a meeting facilitator
can also be useful in the kick-off meeting and when considering specific team issues, like HR
20. Integration Team – Single Acquisition
Adopted from „M&A Integration‟ (David M. Schweiger)
21. Integration Team – Multiple Acquisitions
Adopted from „M&A Integration‟ (David M. Schweiger)
22. Integration of Corporate Functions
Cultural Integration
Systems &
Finance &
HR Information Legal
Control
Technology
Sales & After Sales / Supply Chain
Communications
Marketing Client Services Management
Production/
R&D
Operations
Synergies & Value Creation
24. Integration – Human Resources
Org. Structure & HR Practices Compensation &
Top Management, Alignment Benefits
Key Managers
Evaluation
Payroll Pension & HR Information
Superannuation, Systems
Insurances Compatibility
HR Organisation Plan for
& Competence Relocation of
Personnel
(if need be)
25. Integration – Systems & Information Technology
Standard Central Services & Application/Business
Infrastructure Team Systems Integration
IT Security Policy IT Standards Local IT/Systems
Teams Competency
26. Integration – Legal
Follow-up Memo – Follow-up Due Employee
SPA or APA Diligence Findings Participation/Unio
n Agreements
Risk Management Intellectual Legal Personnel
& Assurance Property Rights Training
27. Integration – Communications
Integration Review of Review/Alignm
Communication Internal ent of External
, Process & Communication Communication
Tools
Corporate Corporate Web & Social
Identity & Culture Media
Branding Presence
Alignment Integration
Intranet Printed
Integration Materials in
Sales &
Services
28. Integration – Sales & Marketing
Integration & Customers/ Revenue
Process Review Stakeholder Protection Plan
communication
Med to Long Commercial Sales &
Term Revenue Contracts Review Marketing
Strategy Support Material
Brand
Alignment/Strate
gy/ Awareness
29. Integration – Supply Chain & Sourcing
Review of Due Plan to Leverage Critical Supplies
Diligence Findings the Joint Risk Management
Purchasing Power
Key Supplier Supplier Contracts
Relationship Review
Management
30. Integration – Production & Operations
Review of Due Plan to Leverage the Critical Supplies Risk
Diligence Findings Joint/ Centralised Management
Production Capacity
Key Supplier Supplier Contracts
Relationship Review
Management
31. Integration – Research & Development
Review of Due Research R&D Resource Testing and
Diligence Portfolio Profile Development
Findings facilities
Design/Develop Sub-contractors Documentation
Leveraging Joint
ment and Other Key Practice
R&D Scale and
Applications in Partners
Capabilities
use
32. There are few certainties in life or mergers.
But with clarity around which factors
matter, we can make better informed
decisions and stack the odds in our favour.