Acquisitions and integrations are two parts of the same initiative: value creation. Understanding how the other functions work, makes you better at your part of the initiative. The Deal Team members that understand integrations can apply that knowledge to improve the odds of success.
This blog is part of a five part series discussing how understanding integrations helps dealmakers.
Part 1: Improved Revenue Forecasting
Part of the acquisition process is to model the future state of the business after the acquiring and acquired businesses are integrated together. Forecasting requires determining what revenues it will make, and when they will be realized. The value of the business about to be acquired is dependent upon when these revenues are achieved.
Forecasting revenues requires the completion of the integration of the two businesses to be completed on time. If revenues arrive later than expected, the value of the business is lower, and the deal terms should be devalued.
The accuracy of forecasting is greatly improved if the dealmaker understands how integrations work.
For example, if you appreciate what is involved in merging the acquired and acquiring product lines together, you can predict when the merged products will be released to market. When you know the release milestones, you can forecast the revenues of the combined business more accurately.
Intista trains, certifies, and mentors employees in how to integrate acquired businesses. Intista’s Certified Acquisition Integration Manager (CAIM) program is recognized by the Alliance of M&A Advisors to have such value, it is now offered to its members as a member benefit.