Whether a merger of equals to gain economies or enter into new markets, an acquisition must be properly planned and executed to ensure a smooth transition.
In March 2015, The NYC CFO Leadership Council hosted “Post M&A Integration Strategies,” an interactive, discussion-based panel which explored the integration of processes, people and the organizational structure of successful acquisitions.
Our speakers included:
Sr. Vice President
| John Clancy
| Karyn Egeland,
| Cyrus F. Lam,
Ops & Technology
Pine Hill Group
- CFOs have a key role to play in M&A integration. They should take the lead on communicating the strategy and thesis behind the merger, define the integration teams and process, and select the right integration team leads by function.
- CFOs should be the “conscience” of the organization and act as a “clinical” 3rd party reviewing and evaluating plans of integration teams.
- Ensure expected synergies are fully evaluated, consider negative synergies that could occur and set realistic expectations for stakeholders.
- Strong business processes and systems are critical to the success of a merger. The acquiring company needs to have processes and systems that can easily accommodate acquisitions. Companies that operate based on “science” are typically better positioned than those operating on “art” with less defined processes and more reliance on key individuals.
- In a merger of equals, the CFO with the best internal processes and systems will typically survive and take the lead.
- System integration can be complex and take longer than expected, so plan this carefully. If the businesses are similar, moving to a single system likely makes sense. But if the business models are different, then having separate systems could be a viable approach.
After our formal panel, our group of 60+ attendees broke out into smaller groups for moderated discussions with our speakers and CFO steering committee members to brainstorm on how smaller companies can prepare for a successful exit. From our peer discussions, we learned that:
- Demonstrating revenue growth is critical
- Act like a public company from an early stage, regular audits, use major audit firms
- Develop repeatable, scalable, predictable business processes
- Ensure the ability to report the financial health of the business on a regular basis, in a repeatable fashion
A big thanks to John O’Rourke, VP of Product Marketing at Host Analytics, one of our fantastic sponsors in NYC, for his help on this article. To read their full article and thoughts on how EPM can help the M&A process, please go here.
Our next NYC program is “KPIs and Corporate Performance Management,” hosted on Wednesday, April 8. Registration is open now!