How to integrate multiple mergers and acquisitions

3 minute read 23 Nov 2021
Authors
Elizabeth Kaske

EY Americas Buy and Integrate Leader

Focused on mergers, acquisitions, divestitures and large-scale transformations. Mother, golfer, runner. Enjoys yoga, wakesurfing and global travel.

Sholape Kolawole

EY-Parthenon Chicago Office Leader

Finance Transact & Transform leader. Chicago office champion. Avid soccer fan. Creative writer. Married with two teenage boys.

3 minute read 23 Nov 2021

Discover an M&A integration approach that addresses the complexities of multiple transactions and accelerates business transformation.

In brief

  • An integration management office (IMO), and sometimes more than one, can help acquirers better integrate multiple M&A deals.
  • Aligning product road maps across businesses is a critical step to harness revenue.
  • Identifying and protecting the knowledge and people that made a merger or acquisition attractive is a critical component of maintaining M&A deal value.

We are seeing a dramatic increase in back-to-back and simultaneous mergers and acquisitions as companies look to accelerate market growth, technological innovation and product capabilities. Here we address how to manage the three biggest M&A integration challenges as companies balance competing deal and business transformation priorities.

The key is to develop an integration model that functions across multiple transactions, addresses increased complexities and stakeholder needs, and of course, drives deal value.

Challenge one: Coordinating governance of M&A deals with business transformation

Companies undergoing significant business transformation are increasingly engaging in simultaneous M&A deals to seize growth opportunities. However, pursuing complex new product launches, system changes or facility consolidation, for example, while executing multiple transactions, can be daunting with finite resources.

Leaders can prioritize and effectively manage competing priorities with a governing body, the integration management office (IMO).

  • The IMO can improve pre- and post-close planning and collaboration based on each deal’s investment thesis and existing transformation initiatives.
  • The latest IMO tools, using real-time data analysis, can track and measure deal assumptions, interdependencies, integration progress, realized value and ongoing risks, and leverage road maps to extract full deal value.

A singular IMO may work for leaders conducting multiple deals. However, depending on geography, timing and business unit for multiple deals, multiple IMOs topped with a transformation management layer may work best.

Not having an integrated road map across multiple M&A transactions, aligned to the investment theses and the overall business transformation vision, erodes deal value quickly.
Sholape Kolawole
Principal, EY-Parthenon, Ernst & Young

Challenge two: Being clear on how to drive revenue: brand, go-to-market and customer strategies

Bringing together multiple brands with unique markets and customers when integrating multiple deals requires more strategic planning at the executive level, and a long-term view.

Aligning product road maps of the various businesses is critical. It demands early executive vision on the guiding “north star” and generating revenue. Thereafter, understanding specific product value and respective trade-offs needed for growth should result in brand alignment and a combined strategy. This is followed by analysis of routes to market to avoid confusion and convey a clear story in the marketplace. The brand and go-to-market strategies should support the investment thesis and growth plans, as should the aggregated organizational structure, processes and technology.

While leaders integrate multiple M&A deals, customers and competitors don’t wait while you figure out your combined product, brand and go-to-market strategy.
Elizabeth Kaske
Principal, EY-Parthenon, Ernst & Young

Challenge three: Creating a combined culture and maintaining the “secret sauce”

For many companies integrating multiple deals, it is not always obvious from due diligence, or even right after the deal closes, what the secret sauce is, and that’s a challenge, especially if critical talent departs with historical knowledge.

Identifying the secret sauce of the acquired companies – and understanding how to preserve it and the critical talent that maintains it – is a vital first step in integrating multiple deals. This will help determine whether the acquired businesses will be at arm’s length, fully integrated or a hybrid; with multiple deals, more choices are likely about the dominant culture. Communicating early and often what the consolidated culture will and will not include can have a positive impact on sales and revenue.

Summary

As leaders contemplate multiple M&A transactions and ongoing transformation initiatives, harvesting deal value is much more complex. Successful buyers are laser focused on governance structure to determine the brand, go-to-market and customer strategy while managing stakeholders through change.

About this article

Authors
Elizabeth Kaske

EY Americas Buy and Integrate Leader

Focused on mergers, acquisitions, divestitures and large-scale transformations. Mother, golfer, runner. Enjoys yoga, wakesurfing and global travel.

Sholape Kolawole

EY-Parthenon Chicago Office Leader

Finance Transact & Transform leader. Chicago office champion. Avid soccer fan. Creative writer. Married with two teenage boys.

Webcast: How to refresh your M&A strategy in a world of fully valued assets

Discover ways to capture more synergies and overcome the latest challenges in realizing deal value.

Watch on-demand

Contact us

Connect with our Strategy and Transactions team.