What is Acquisition Integration?
(Also known as Post-Merger Integration)
After you Buy a Business, What Have You Got?
You have two businesses
Usually small and mid-size businesses are bought for their future potential, not the current status. To get the value out of the purchase, you need to plan how you will get this value, and you need to execute that plan. Often the plan is to integrate (or "merge") all or parts of the two businesses together. This is the acquisition integration in a process known as "post-merger integration".
An Acquisition is Not Just Buying a Business
An acquisition requires you to get the value from purchasing a business. There are two distinct phases:
- The Deal: finding, valuing, negotiating, validating, financing and purchasing a business
- The Integration: planning the integration of the businesses, to deliver the value that the Deal Team envisioned
The Complexity of Post-Merger Integration
When you integrate two businesses together, you will transform both businesses into one, having to:
- Address the "Five Areas"
- Accommodate the different business functions structures
- Sustaining the business revenues
- Allay the concerns of employees who are not accustomed to a lot of changes taking place
Intista developed the SSIM™ (the Small business Simple Integration Method) as a less complex, more understandable, approach to acquisition integration
Learn more here
Find out how we train your employees to be your in-house integration teams
The Five Areas to Address
Every business is different. They have different products, customers, locations, regulations to adhere to, and more. However, there are distinct areas to address. These are the five focus areas of business transformations:
The people in the two businesses
Different technologies and products
Every business has its own unique combination of the five areas, e.g. the org chart, the way it makes a product, and how it generates income. Within a business, it is likely that each team, department, or office would have its own variation of the firve areas.
The challenge of acquisition integration is to merge together two businesses and all of the teams within them, with all of their unique characteristics - while simultaneously maintaining the revenues, retaining the staff and continuing to create new products.
Teams, Departments or Verticals?
Businesses can work in many ways. In simplistic terms, we consider the three arrangements
Business functions are in separate departments/teams
Each vertical look after its own business functions
A Back Office (shared services) provides some functions. Others are held in each vertical