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
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:
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
1. A successful integration team delivers the value defined by the Deal Team
- Businesses that don't integrate acquisitions waste the opportunity of getting the value from the deal
- Purchasing a business does not deliver value: it comes from the integration of the two businesses
2. In-house expertise, which is transferred between successive acquisition integrations
- Create an in-house acquisition integration team, using the knowledge of established experts
- Invest in your team, and transfer experiences between successive acquisition integrations
3. Control the cost of getting external integration expertise
- Know the cost of the training and certification, up front
4. Improve the way that you approach and deliver integrations in the future. If you already acquire and integrate, avoid the cost of inefficient methods in:
- Cost avoidance
- Staff retention
- Faster onboarding
- Improved productivity
- Staff engagement
5. Trained employees are happier employees
- Certified employees perform faster, are more engaged, and have better work outcomes*
- Organizations that invest in employee training demonstrate that they have faith in that employee and morale improves
- Improved morale creates more engaged employees, which makes them more productive
Conquer operational performance challenges in acquired businesses
Intista’s Certified Acquisition Integration Manager™ program applies our proprietary Small business Simplified Integration Method (SSIM™) which establishes a repeatable process to improve integration efficiencies.
Develop your company’s in-house acquisition integration expertise and capabilities through our Certified Acquisition Integration Manager™ (CAIM) program.
Our CAIM program covers how to plan, announce, and run the integration of an acquired lower-mid or mid-size.