Expert Insights

Protecting the value of your acquisition

The recent series of major mergers and acquisitions (M&A) is a strong indication that we’re moving towards economic recovery. With companies apparently more confident to spend cash stockpiled during the depths of the recession, and private equity firms sniffing out good investments, we spoke to post-acquisition integration expert Philip da Silva about the importance of a well-planned integration.

Any successful acquisition starts with a robust strategic plan built on scrupulous due diligence. But once the deal is inked, the real hard work starts.

Ensuring smooth integration as quickly as possible is a vast, complex and multifaceted task that affects every aspect of the businesses coming together: people, processes, systems and culture.

Most management teams start well with lots of enthusiasm, but you have to maintain that momentum

Most management teams start well with lots of enthusiasm, but you have to maintain that momentum, says Philip, who’s presided over many integrations over the past several years. “The problem is that it can take months to complete but day-to-day business soon takes over. Senior managers can lose focus, the integration programme becomes a nuisance and it’s never completed properly.”

“The result is a company that’s not performing well, where key staff have lost confidence and left. Then the markets and shareholders start calling into question management’s ability to deliver.”

Dedicated resource

As with any complex project, the key to delivering is investment and resources. While management needs to remain in overall control to make strategic decisions, Philip argues that practical delivery should be left to a dedicated expert. That person, whether sourced internally or externally, will have the sole task of driving change and delivering the strategic vision.

“In my experience, the best time to bring that expertise on board is a couple of months before the deal is finalised (if possible) and once the rationale for the M&A is established,” he says. “A common mistake is starting too late. You need to engage with your middle managers as soon as possible.

“The person in charge of delivering change would join the top team, work closely with the directors and report directly to the CEO. He or she would put a clear timetable together with what needs to be done. This person’s job is then to present senior management with the information they need at various stages so they can make the strategic decisions.

“More often than not, a lot of the projects involve integrating systems and IT infrastructure, and that’s where delays can creep in. You need to have the mechanisms in place to deal with systems and processes quickly.

Communication is key

“Engagement with staff is also critical. Senior leaders need to show visible management, engage with employees and be honest and open about what’s happening. If there are to be redundancies, this needs to be explained. You want to retain your best people. The competition will be circling – don’t give them the opportunity to take advantage of uncertainty.”

Philip says that most integrations often take nine to 12 months and can involve up 15 individual projects. Large-scale integrations can easily last two years. Clear timescales, responsibilities and buy-in are vital.

“Shareholders and investors are looking for you to protect the value of the acquisition, make sure it achieves the synergies and your goals – whether that’s making savings, unifying your product range or creating a stronger brand. Post-acquisition integration is probably the biggest change-management programme you’ll ever go through because of the way it encompasses everything and has such a high profile.”

Put simply, you’ve got to get it right.

Protect your acquisition

  • Put someone in charge of delivering your strategic plan.
  • They will divide the plan into clear, timetabled workstreams.
  • They will give you the information and confidence needed to make strategic decisions.
  • Open and honest communication is vital for morale and retaining the best people.

Philip da Silva

Philip da Silva has more than 20 years’ experience at boardroom level, including as a managing director. For the past eight years he’s successfully delivered complex post-acquisition integration projects for large and medium-sized global organisations across a wide range of sectors.

Williams Bain

Williams Bain is an exclusive hybrid interim and change management provider. We’re trusted by some of the UK’s largest organisations to support the implementation of complex strategies that accelerate results and lead to definitive, positive and measurable change.