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M&A Integration: How To Do It

M&A Integration: How To Do It Planning and delivering M&A integration for business success

Author: Danny A. Davis
Publisher: John Wiley & Sons
ISBN: 9781119944867
Published In: September 2012
Format: Hardback , 334 pages
Jurisdiction: International ? Disclaimer:
Countri(es) stated herein are used as reference only

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The flurry of M&A deals announced in 2011, including AT&T's agreement to acquire T-Mobile USA, ConAgra's proposed bid for Ralcorp, and eBay's acquisition of GSI Commerce, indicate that M&A has returned, and is perhaps headed back to the levels seen before the financial crisis.

Most firms of a certain size will turn to it in their search for growth, forcing almost all managers to face up to the challenge of integration at some point their career. For many managers it is often their first, and only time and M&A is high on the list of things that many managers hate. According to many studies, 50 to 75% M&A transactions turn out to be a failure. One of the main reasons for failure is late or wrong integration or bad integration management. There is a significant demand for more information on best practice in Post Merger Integration.

This book intends to equip those managers for the task…

Danny Davis demonstrates how to handle the post-merger integration process and show how to restructure, consolidate, reduce costs, create efficiencies and perform M&A, from smaller transactions to mega-mergers. The focus is on integration planning and delivery. The book combines a general/strategic view with detailed information of how to actually conduct a Post Merger Integration via very practical tools and check lists that will prove essential in delivering change before, during and after transactions as well as to ensure their success.
PREFACE xi

ABOUT THE AUTHOR xv

INTRODUCTION xvii

PART I THE STRATEGIC DRIVERS 1

1 M&A OVERVIEW 3

Chapter summary 3

What types of M&A are there? 3

How much should we pay? 5

Most mergers fail 7

Dene success 10

The M&A process 10

Strategic M&A process 14

Strategy: linking pre-deal and post-deal strategy 15

2 INTEGRATION OVERVIEW 19

Chapter summary 19

Integration objective 20

What is integration? 21

Integration strategies 22

Reason for success 23

Will we succeed? 27

Learning from mergers 28

Different mergers at different stages of the company life cycle 33

What should we expect during the integration? 34

Transforming the business 36

3 PLANNING FOR INTEGRATION 39

Chapter summary 39

Model for integration planning 40

Integration checklist 44

What is 100 day planning? 45

Day 1 58

Information 61

Bringing the companies together 63

Planning for “the dip” in productivity and service 64

Review integration readiness 67

4 INTEGRATION DRIVERS 71

Chapter summary 71

What a re synergies? 72

How deep to cut 74

The principles of integration 75

Budget for integration 83

Integration tracking 85

2nd wave integration 86

5 INTEGRATION GOVERNANCE OR STRUCTURE 89

Chapter summary 89

Put people in place 90

Responsibility and accountability 93

Controls in place at different levels 94

Board tracking of integration 94

Agree reporting requirements 95

Teaching integration in our company 98

Integration standards, tool kits, process 99

Risk workshop and risk management 100

Track progress 104

6 DELIVERY – “INTEGRATION MANAGEMENT” 109

Chapter summary 109

Mobilize a merger team 110

Strategic delivery of integration 110

Roll out new procedures for managing projects 111

Integration Management O= ce 113

Integration management 115

Strategic plans, parallel planning process, detailed plans 120

PART II THE FUNCTIONS 125

7 FINANCE 127

Chapter summary 127

Links with other parts of the integration 128

Finance readiness review 130

Financial integration strategies 132

Learning points for " nance 136

Outsourcing 137

Financial basics 141

Financial risk management 144

Benchmarks, key performance indicators 144

What infrastructure is needed? 145

Finance organization – people 146

Processes and IT 146

8 IT 151

Chapter summary 151

IT perspective day 1 152

Assess readiness for integration 152

IT and integration strategy 154

Reasons for change in IT during a merger 156

Level of integration 157

Links with other parts of the integration 158

Issues during an integration 162

Do the basics 168

Integrate or consolidate systems 172

IT integration success 173

IT integration checklist 177

9 HUMAN RESOURCES 179

Chapter summary 179

HR for the integration (outside HR) 180

HR checklist 199

HR for the HR integration 200

10 COMMUNICATIONS 205

Chapter summary 205

Management communications 208

Communications overview 210

Communications for the whole integration 214

Communications perspective day 1 219

The integration of communications 220

11 SALES AND MARKETING 223

Chapter summary 223

Links with other parts of the integration 226

Sales and marketing overview 227

Brand 235

Culture of sales and marketing 239

Communication planning 240

Integration of sales 241

Integration of marketing 243

Customer perspective day 1 244

Revenue generation 245

12 SUPPLY CHAIN 249

Chapter summary 249

Supply chain perspective day 1 250

Level of integration – how far to integrate 250

Links with other parts of the integration 250

Operating synergies 254

Process review 256

Management controls 257

Supply chain overview 258

Revenue 264

13 HEAD OFFICE AND PROPERTY 267

Chapter summary 267

Head once consolidation 268

Property, level of integration – how far to integrate 269

Property integration 270

14 PROCUREMENT, R&D, LEGAL, HSSE 273

Chapter summary 273

Procurement 273

R&D 277

Legal 280

HSSE (Health, Safety, Security, Environment) 281

15 BOOK SUMMARY 283

Tying it all together 283

The “chain of events” 283

Could we be better prepared for our integration? 284

The killer insights for integration 284

APPENDICES 293

APPENDIX 1 – INTEGRATION TRAINING 295

APPENDIX 2 – CULTURE DIFFERENCE

ASSESSMENT 297

APPENDIX 3 – PEOPLE IN THE BOOK 299

INDEX 301
Danny A. Davis is a guest speaker at a number of the world’s top business schools on strategy and M&A and is a Programme Director at Henley Business School for M&A. He brings a unique background that combines experience as an international sportsman, sales and marketing in large corporate, a strategy consultant and has been involved with integration for two decades. This background means he understands the theory but combines this with a proven ability to deliver M&A integration and large transformations in highly complex organizations.

Danny has worked on deals from small to large, with a 100 man company taking over a 25 man, through to $6bn and $16bn deals. His work includes 1-2 days with a client to set up the integration, mobilization workshops and 100 day plans. Through to the actually planning and running of a $6bn deal across 30 countries for 3 years. He also helped manage one of the largest HR transformations on the planet, showing his level of people understanding.

Danny has just stepped down from being the youngest ever trustee (Non-Executive Director) on the board of the Chartered Management Institute, also chairing the Marketing and Policy Committee, he currently sits on there “Experts Panel”.

He speaks at numerous conferences and recently chaired the M&A integration conference in Europe. He has written articles for Henley Business School, British Computer Society, CFO Europe, Developing HR Strategy, and had a 3 page profile written on him by CIMA magazine for leaders.

He brings a blend of strategic theory, practical experience and real life war stories that makes him unique in this field.

Danny A. Davis, (MBA Bsc (Hons) DipM MCIM MCMI Cmgr Chartered Marketer) is a partner with DD Consulting, Henley Business School’s Programme Director M&A and helps a large investment fund.