Integration deals with social issues, business processes and controls of both the buyer and the seller, and how to combine all of these elements. When the buyer and the seller are well integrated, the acquirer’s ROI is maximized. In the integration phase, Watermark provides consulting advice to M&A clients on key areas such as: cultural integration strategies, identifying integration process leadership, defining roles & responsibilities, resource alignment, task force infrastructure development, communication strategies, recruiting processes, capturing synergies, and measurement processes, among other areas.
Acquirers often underestimate the challenges of integrating their business with that of the company they acquired. Companies with effective policies for the post-merger period can improve odds of success in capturing ROI by as much as 50%. Despite that fact, there is an unmistakable gap between integration best practices and leadership behaviors. In a 2014 study conducted with acquirers by Galpin and Herndon for their book The Complete Guide of Mergers & Acquisitions, 73% of respondents rated leadership as the most important criterion for integration success. However, 60% reported their company’s leadership as “very poor, poor or average” at making timely, effective decisions.
The survey also found that 74% of acquirers considered themselves “very poor, poor or average” at using an objective process to decide and implement organizational restructure, staffing, selection, and exit decisions. Fifty-seven percent considered themselves “very poor, poor, or average” in being able to effectively onboard, orient, and train newly acquired staff.
To capture significant, positive ROI, integration planning and implementation is a must to be mastered. Watermark uniquely continues to work with our M&A clients beyond the deal table, beyond Day 1, beyond Day 100, to ensure our acquisition clients ultimately win with acquisitions.