The Do’s and Don’ts of Post-Merger Integration

With M&A deals being completed rapidly amid pressure to integrate and capture projected deal value, post-merger integration (PMI) is a crucial step that must not be overlooked.


23 November 2021

Intralinks Post-Merger Integration

In the current deal climate, navigating a successful integration has never been so important. In a competitive, fast-moving seller’s market with sky-high valuations, where deals are being completed in record time, all too often not enough attention is given to post-merger integration plans.

During “Mitigating Day One Strains,” a panel held at the recent SS&C Intralinks M&A Summit, we gathered a group of veteran dealmakers — Michael Holm, partner at Global PMI Partners; Agustin Diaz Sanchez, associate director, MA at Amadeus; and Danny Davis, partner at DD Consulting — to discuss this crucial topic.

According to the panelists, it is essential to communicate with all the people involved, including employees, customers and suppliers. Every detail needs to be carefully thought out by a team dedicated to executing the integration plan.

How to drive and track a day-one plan

The panelists advised the creation of a document to highlight the project plan for all the business functions involved, including IT, HR, sales and marketing. This document should include:

  • What needs to be done on integration
  • What needs to be implemented two or three weeks pre-deal and two or three weeks after day one
  • Who is going to be in charge of those activities
  • The date tasks need to be completed
  • When the integration plan ends.

The acquiring company will need to approve all action items. It is important to share the integration plan with the target company and organize workshops to prepare. The key to successful PMI is to have the plan reviewed by the stakeholders executing it and to designate a steering committee to follow the plan’s progress and make important decisions.

Every deal is different, and full integration is not always necessary. Therefore, it is important to understand how much integration is required and the strategic objectives of the acquisition.

The must-do tasks

Disruption to the business must be avoided at all costs. Having control of the plan is critical to ensure business continuity from the start. A successful approach is to track financial reporting to measure how the company is doing in the first days and weeks post-integration.

For example, there is nothing better than creating a relaxed atmosphere during a dinner meeting with the acquired firm’s staff, not just top management. Ideally, management presentations should also be face-to-face.

Ahead of day one, a communication plan should be ready, detailing what you are going to say and to whom. Also, the communication between signing and closing is important. All parties involved will need to understand when things will change, and all involved will be reassured by good communication.

Unlike what many people might think, a retention bonus is not the best solution for keeping talent. The panelists advised the need to understand what motivates people to help gauge if they want to remain. It is good to start from the assumption that management will leave in a year or two. In parallel, it is a good habit to think about succession planning.

Our thanks to Michael, Agustin and Danny for sharing their perspectives. You can watch the conversation in its entirety below.

Duration: 60 minutes



francois-dontot-intralinks

Francois Dontot

Francois has spent the last 10 years in the M&A business, leading Intralinks in France.