Mergers & Acquisitions - Part II - Integration

Now that the deal is closing and you haven't slept in a while, believe it or not, the actual difficult part begins - the integration.

Having been responsible for integrating two purchased companies into a platform company, I can provide some clear do's and don'ts to help you prepare for this stage of the merger/acquisition activitythe .

1) MOST IMPORTANT - Have a clear, detailed workplan for all departments and the overall company. This plan should be created during the negotiation stage. It should be finalized at least a few weeks before the actual closing day. It should tie very closely with the financial model that the acquisition is based upon (more on that below).

The workplan should detail out the following areas:

By department:
- human resource issues
- communication plan within the dept
- system decisions within dept (if appropriate)
- policy and procedure changes (short-term and long-term)

Overall company:
- human resource issues
- change in hr policies, benefits
- firings/layoffs
- job responsibility changes/ reporting to changes
- communication plan
- internal communications
- external communications to customers
- external communications to vendors
- press releases, etc
- policy, process and procedure changes
- system integration(s)

2) Day 1 - meet with the company, make the official announcement, explain the reasons/benefits for the acquisition, provide details of the overall integration workplan

3) Make sure that your managers (especially sales and operations) keep their focus on the current customer base

4) Consistently communicate through the whole integration process with all your stakeholders

5) Compare your financial model that was developed for the proposed acquisition with actual financial results. Look for deviations and correct them as quickly as possible. This financial model should be detailed down to line items in the profit & loss (expected increases/decreases) and should be tied to a human resource plan of employees by department.

6) Have events (lunches, after-work social events, etc) as early as possible between people from both companies

Now some don'ts (or things to avoid if possible)

1) Don't automatically take the less expensive/less extensive benefits and provide those to the company.

Determine which company has the better benefits.

If it is the acquiring company, then determine the costs to 'upgrade' the benefits of the acquired company's employees. (This will go along way to building trust and positive attitudes to the overall change.)

If it is the acquired company, determine the impact to those employees of the acquired company if their benefits are scaled back. Make some type of monetary gesture if this path is followed.

2) Don't forget the owner(s)/senior management of the acquired company

Make sure you have a detailed understanding (and employee/consulting contracts) with the owner(s)/senior management of the acquired company. Though it might be expected that they will not be long-term employees of the new combined company, remember they have usually a large amount of goodwill with the employees and customers and knowledge of the inner workings of the acquired company. Make it worth it for those people to stick around for at least the integration. You might find that they are perfect for other positions within the new, larger organization.

3) Don't forget the systems. Make sure you know how bills are going out to all your customers. Make sure you know how all your financials are going to roll up into one group of reports. Finally, make sure you know who is paying bills across both companies.

4) Think about logos and company letterhead. How soon you should be using a standard logo vs. a DBA (doing business as).