M&A Integration : getting it right first time
…The Long and the Short of getting M&A right first time
It is widespread knowledge that 50% to 80% of all mergers and acquisitions fail to deliver the benefits described in their business case, and a sign of blissful ignorance that so many companies continue to embark on major acquisitions or mergers whilst ill-prepared, confident that they will reach a successful outcome when in fact the odds are seriously stacked against them.
On the other hand, numerous case studies show us that companies that have grown through a series of mergers and acquisitions demonstrate repeated success in integrating these new businesses. This proves that there are lessons to be learnt, and that repeated experience is essential to be able to plan, prepare and execute a complex integration to deliver a positive and value-creating outcome.
Business as “unusual”
Integrating companies has very little in common with “business as usual” : it requires the ability to execute a complex business transformation programme whilst driving two businesses, rather than one, which are most probably both destabilised and whose employees’ effectiveness may dip as a consequence of the distraction and uncertainty caused by the merger, whilst also reaching the commercial targets set in the business plan, the synergies expected from the merger or acquisition, and creating the target organisation with fully integrated processes, ways of working and culture.
The challenge for the team at the top is therefore huge; it actually becomes an impossible task unless additional resources are called in and responsibilities clearly segregated between maintaining the day-to-day business on track and driving the integration effort.
What really matters
Integrating business is an art : the combination of skill and talent. The skill is in the way one can achieve one of the essential components of a successful integration : speed. Speed requires preparation and excellent programme management. The talent is that of good leadership to drive durable change. This is why serial acquirers are remarkably good integrators : they know what can be prepared in advance, they are aware of the interdependencies that need to be managed throughout the integration programme, they have learnt to plan for the usual hurdles which appear in such business transformation initiatives and have developed a flair to pre-empt issues in their early stages. They also know what traits of leadership are essential to drive change and how gaps in some individuals’ talent can be overcome.
There’s always a first time
Before becoming an excellent serial acquirer, every company has had a “first” and learnt from someone who had the experience and the ability to transfer that knowledge onwards. The icebreaker team includes individuals who have successfully driven numerous business integrations, often on a continental scale. By working with the Executive teams of client companies, they allow these businesses to manage the dual focus of on-going commercial activity and integration. In doing this, the organisation progresses along a learning curve, having gathered a capital of knowledge and new experience which will be of immense value for the integration of the next acquisition. This is the substance of icebreaker’s motto : “We transform management team capability to leave a revitalised legacy”.
About Paul Siegenthaler Icebreaker Executive M&A lead
His expertise, excellent interpersonal and communication skills were major factors in our success in bringing the two companies together so quickly”. “CEO, Linpac
“Paul Siegenthaler’s experience as a practicing manager in the field of international M&A is unrivalled. His insights and advice are invaluable”. Professor Christopher Bones, Dean, Henley Business School.
Paul Siegenthaler Bio
Paul Siegenthaler has successfully delivered integration programmes on a variety of scales, from a continental scale with a programme budget exceeding USD 100 million, to local integration or carve-out projects. Upside range from an annual EUR 8.3 million improvement in EBITDA in the case of a European merger, to a total USD 193.3 million in the eight years following the completion of a USD 110.8m programme in North America