M&A and Integration

Years ago I sold a company to 3Com. The CEO arrived at the 3Com campus for a 5:00PM meeting and security wouldn't let him in. He wasn't on any list and they couldn't reach the team to get him an escort. He was gone within months.

This example shows precisely why “Integration” is one of the key stages for an Optimal Outcome. Nearly 53% of mergers fail to meet the buyer’s or seller’s expectations, and integration is the leading factor. The best buyers allocate budget and people for integration and also map progress regularly against defined milestones. EMC is very good at this, for example. When they close a deal they have capital ready (double digit percentages of the transaction size), a product plan, and clear reporting structures and duties. They meet every thirty days to assess progress, and they have people who are accountable for the milestones.

However, remember that companies making their first or second transaction don't have this discipline. They usually let the people work it out for themselves, which can then lead to turf wars, inefficiencies and stagnation.

For more information, visit our 8 Stages to an Optimal Outcome or attend a Selling Up, Selling Out conference in your area. 

Posted by , on 4 June 2014
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