Post Merger Integration (PMI)

Integration Playbook (Continued)

The Playbook sets the standard for speed, consistency, accountability, and repeatability, serving as a shared reference for structuring, planning, cooperation, and discipline at each stage. It encompasses objective evaluation, clear communication, accelerated integration, and a quick return to business as usual. Furthermore, the Playbook offers a rigorous, systematic framework for integrating target companies, improving speed, consistency, and control. It establishes a team-based governance structure to link integration strategy to task-level actions. Importantly, the Playbook should be tailored to reflect your company’s strategy and goals, appetite for risk, operating structure, corporate culture, IT capabilities, communication capabilities, and relationships with stakeholders.

Integration Playbook Components

• Methodology: Consider company’s integration strategy and approach, governance structure, tools, communication methods to support deal.
• Leadership: Define key integration leaders, extended team members, integration roles and responsibilities, team skills and training.
• Process: Integration planning steps during evaluation, due diligence, closing, post-closing phases; tools to be used,  any tools to help integration teams collaborate efficiently, quickly and consistently.
• Standardization: Define integration team’s interaction with executives, business leaders, other stakeholders; guiding principles to be captured & shared, standards to be adopted for analyzing data & making decision.
• Repository: Centralized repository of information for all M&A team members, includes standard format for capturing and sharing information.
• Communication: How to address specific concerns of each group of stakeholders, including employees, investors, customers, vendors; main consistent message and tone; process for ongoing shareholder dialog; how to use communication to retain employee and customers during period of disruption; clearly articulate it’s deal thesis and reasoning behind decision.
• Knowledge Management: Learnings from previous integrations; how to retain knowledge accumulated during upcoming integration.
• Organization Structure: Consider how to migrate different management structures into a single management team; impact of these changes.
• Workforce: Determine the impact of employee selection and retention; how to combine two workforces that come from different corporate cultures; how to communicate transparently with all workers.
• Business Process: Confirm critical business processes at the company as well as the target company; confirm processes for the combined company.
• Systems: Identify what systems will be redundant when two companies are combined; how to decide which company systems will be adopted for the future company.
• Data Management: How do we consistently migrate systems and data; understand requirements for key systems throughout the integration, and for the go-forward company.
• Policies: Identify key governance and operating policies required for the integration, and for the go-forward company.
• Contract Management: Understand contractual obligations for both companies; how to leverage favorable terms.
• Legal Entity Structure: Do we need to change the legal structure of the go-forward company; impacts to accounting, taxation, operations, sales, manufacturing, and support functions.
• Customers and Vendors: how to align sales force and customer assurance programs; how and what message to communicate with customers and vendors.

Key Tenants of a Successful Integration

Capturing sustained economic value in M&A is a challenge. Regardless of deal size, complexity, or geographic reach, some fundamental tenets are key to success for realizing deal objectives:

• Accelerate the transition to obtain bottom-line results quickly and maximize shareholder value. There is no value in delay. Prolonged transitions slow growth, reduce profits, destroy morale and productivity, and lead to missed opportunities and loss of market share.
• Clear integration strategy to be defined and communicated. Integration is highly tactical effort, and must be implemented to capture and protect the value of the deal; best to have well defined integration strategy.
• Focus resources on priorities with potential for value capture. Shareholder value must drive allocation of resources in priority of potential financial impact, probability of success, and timeline requirements.
• Prepare for Day One critical tasks to avoid surprises. Identify critical day one tasks early before longer-term detailed planning starts; promptly identify longer lead time items to avoid closing day surprises.
• Communicate early and often with all stakeholders. Communicate with stakeholders including customers, employees, investors, vendors, and public; including reasons, timing, key actions, unknowns, etc.
• Establish leadership and role clarity at all levels. Requires significant high-quality committed resources; critical to assign accountability, functional authority and role clarity at each level.
• Manage as a Business: Run integration as a well-defined process to focus resources and capital on the right activities at the right time.

Integration Roadmap

Integration Process

Integration Business Case