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The Many Ways to Integrate an Acquisition 

 June 2, 2016

By  Steve Nunn

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Acquisition integrations are when the parent company swallows up the target (acquired business), right?
Well… not exactly.  There are different approaches in how to merge, or integrate an acquisition. Here’s an overview of them, looking at it from my specialty of working with Small and Medium sized Businesses (SMBs).

Consolidate

Consolidate

Consolidation is the most common form of integration, where all of the business functions are absorbed into the parent. The identity of the acquisition can be maintained as a brand, or may be phased out over a period.
Consolidate integrations try to complete the majority of integration projects quite quickly, while accepting that some projects, e.g. IT integration or healthcare benefits, will take significantly longer.

Leave Autonomous

Autonomous

Leave Autonomous is where the two businesses are left alone for an extended period of time. At some point in the future there will be a short, well planned, integration period.
After the integration either

  • Some of the acquired business functions are assumed by the parent
  • Or the acquired business is Consolidated into the parent

Tackle Mismatch

Mismatch

Tackle Mismatch is when you want to Consolidate the two business, but there are a couple of situations why you should not do this

  • When two business products/markets are incompatible (for example a truck company acquires a sports car company)
  • When the acquired company is so intertwined that it is near impossible to match them to business functions in the parent

In either case you should not try to Consolidate this acquisition. You should use Leave Autonomous, so that the two businesses spend significant time learning about the other and selectively pick out the functions that can be integrated, if at all.

How To Do The Integration

Before you acquire a business, you must understand how you’re going to integrate it with your current business. If the financial success of the integration is dependent upon a Consolidation approach, but discover that you have to use Leave Autonomous for two years, is the acquisition still viable?

To Learn More

To find out more about this topic, and how to integrate and acquired small or mid-size business, subscribe to our training that teaches you how to set up, manage and report upon your integration, yourself.

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