Preparing for a Successful Merger and Acquisition
It’s finally time. The papers are there before you, and as you look around the room, you are met with the faces full of anticipation of those you’ve been working with for the last few months. This is what you’ve all been working toward. This is what you and your teammates have spent endless nights working to perfect, and the moment is finally here: the signing of your merger and acquisition deal.
Everyone sits at the edge of their seats as your pen inches towards the blank line on the contract. Then suddenly, you stop and doubt clouds your mind. Ideally, everything about this deal seems right. Then again, more than 50 percent of M&As fail because of assumptions just like this. And with the industry and circumstances continuously changing, how can you truly predict the outcomes of an M&A? Are you making the right decision? Will this M&A be successful?
If any of these questions have ever crossed your mind, don’t worry. You’re not the only one who has doubts about M&As. Thankfully, we’ve created a list that will help you create a successful M&A.
Due Diligence Checklist
A due diligence checklist is the easiest way for you to gather information about the acquired company. It contains aspects, such as financial standing or corporate culture, that you should look into and understand before an M&A.
Along with the due diligence checklist, you should also be analyzing the corporate culture of those involved. Culture defines a company — leadership styles, how decisions are made, organization and structure — and knowing how you and the acquired company are similar or different can assist in many ways.
Set Clear Goals
Your M&A is more likely to succeed if you have a clear direction for people to follow. It is extremely important that you get people on board with your goals as soon as possible because it will help employees accept the changes that accompany an M&A. When setting goals, make sure to keep in mind that people like to have meaning in their lives and work, and that the goals you create are achievable and realistic.
Create a Strong Integration Team
Having a strong integration team will assist you tremendously. The individuals you choose will be the bridge of communication between you and your employees. They are the ones people will go to for help, so it is extremely important that the individuals you choose for the integration team are those who believe in your cause and will help you make your M&A run smoothly.
The 100-day plan is a good way for you to implement and create an M&A process. This plan documents the things you wish to achieve, as well as things you should do, to make the transition as smooth as possible within the first 100 days after the closing of the M&A. The 100-day plan typically includes things like meeting key personnel from the acquired company within two weeks, or making sure to address certain policies. Creating a 100-day plan will assist in future M&As and help to decrease the integration period.
Along with the idea of open communication, make sure to reassure employees about their positions after an M&A. Although job descriptions may not have changes, it’s good to let employees know this so that they don’t have to overthink and stress out even more. They are already being bombarded with various changes. Don’t let their job description be one of the stressor points. Instead, reassure them by telling them exactly what you expect from them, and direct them to people who can answer any questions or concerns they may have.
Now that you’ve done all this work, talk about it. Communicate your plan, goals and expectations. Make sure employees know what’s going on and how these changes are going to affect them. It is important to inform employees by either addressing their concerns directly, or appointing personnel who will do this for you. This will help to create trust and understanding, which will only assist in making your M&A more successful.
Now that you know what it takes to create a successful M&A, feel confident about your M&A. And if you would like any assistance, feel free to contact us.