After the Deal: Three success factors for M&A integration
April 12, 2019
Integration services related to mergers, acquisitions and carve-outs have been at the core of Midagon service offering as long as we have existed as a company. Working exclusively on these projects over the past couple of years, I have learnt that while each deal is unique, successful M&A integrations in general share certain characteristics.
Even though the environment at and around a major M&A deal can seem like a pressure cooker – companies are transformed in a short time under intense stress – on the practical level integration initiatives are like any intense and business critical change programs. While a poorly executed deal integration can seriously damage a company’s future prospects, it is possible to navigate a complex change course successfully when the team has the right professional skills. In an environment like this, the leadership team needs to have the experience and perspective to differentiate normal pressure indicators from serious alarm signals.
In addition, M&A integration often involves a wide variety of change initiatives that have complex dependencies and must be coordinated tightly to meet deadlines and achieve planned synergies. Deloitte M&A trends 2019 report found that effective deal integration is the most important success factor for realizing the business benefits. This requires excellence in program and change management.
Most of the integration costs relate to ICT implementation. While it is relatively uncomplicated to bring merger partners physically into the same network environment and provide access to applications, it is far more difficult to build a sound and future-proof ICT architecture from components that originate from various sources and purposes. Unless the merger partners have already built flexible ICT architectures and assessed each other’s assets during due diligence, ICT integration is likely to take longer and cost more than most other integration activities. According to a McKinsey report, merger synergies link closely to ICT capabilities. The merger partners’ ability to integrate ICT operations – and functions enabled by ICT – can determine the realization of deal synergies.
We at Midagon focus on these exact success factors. Directing change under pressure is what we do best. We have a proven track record of effective execution in time-critical projects and deep skills in successful IT integration. You can read more about our M&A integration perspectives in our White Paper.
We look forward to realizing the full value of your deal.
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