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Is Your Business Ready For Acquisition and Integration?

Post by Admin , Sep 06, 2019.
Business Consultancy

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Is your business planning to make an acquisition or has it recently acquired another business?

Have you considered how that business will integrate or are you part way through the integration stage?

 

There are various reasons why a business will acquire another business and unless it is a strategic acquisition that takes the company into a new or different direction, it is important to ensure that the integration of that company is as seamless as possible.

The rational for the acquisition will have consequences on the extent of the integration required and how far that will be taken but there will undoubtedly be cross over of processes and resources etc where savings and improvements can be made both in the acquired business and in the acquirer.

Decisions on integration of a business should ideally start by the time the acquisition has taken place. Whilst it may not always be possible to understand the required level of detail to make a final decision on what should and should not be integrated, there will be sufficient understanding for the implementation project to be set out with the final detail to be set out and agreed later.

With a more detailed understanding on the acquired business is will be possible to execute plans and ensure the benefits and rational for the acquisition are realised as quickly as possible.

In too many cases, implementation is not fully considered or tackled in a timely manner resulting in a deterioration of the acquisition rationale being achieved and the benefits delayed. The longer this is allowed to continue, the more damage can often be caused so grasping integration is an essential element of an acquisition but often not as easy as it may first seem.

Some of the issues to consider: -

  • Roles

What roles in each business have common features or may be mirrored, can these be rationalised and if so, what is the impact? If roles are being merged, who is the best person to fulfil the role? Ensure you are objective about this and where there is a risk of redundancy that this is approached with sensitivity and caution and above all undertaken fairly and correctly to avoid negative ‘fall out’ or employment claims being raised.

  • People

Change is not always welcomed by everyone and more often than not, change is resisted. In any acquisition it will bring about change that will impact both businesses and it is important to consider the human impact of the acquisition and the changes that are likely from simply working with new people, through to the changing or job roles or possible redundancy there will be an impact on staff. To minimise damage to both businesses, consider the impact of change and have a change management and communication plan in place to cater and deal with this and reduce the potential for negativity.

  • Processes

Review the processes and methods of operation in both businesses. Whilst there is likely to be commonality if acquiring a business in the same sector there will be elements that are unique to each business. It is important to assess such processes objectively to ensure that the best method of operation is established, and the acquiring company does not force through process changes that actually take the business backwards rather than forward.

  • Systems

In much the same way as processes will have commonality so may systems. In most industries there will be a number of systems that a business can adopt which will all have different user interfaces, methods of working and availability of technology. Again it is important to objectively assess which system is better and what can be learned or taken from each system to ensure the newly formed business benefits from the overall knowledge acquired with the result being that the best system is retained or acquired to take the business forward.

  • Locations

Where there is more than one location is it possible to bring these together? What will be the impact on staff and customers by moving or closing an office and how can this be managed and negative impact minimised. As with all these points detailed consideration needs to be given to this but moving and changing premises if fundamental and long term and making a poor decision can have severe consequences.

  • Customers

It is often the case that customers are not aware of the acquisition for obvious reasons, however, through due diligence establishing who the customers are is possible. It is appropriate to consider how the acquisition will affect customers and what they may perceive and what may be reality. How you handle this and communicate with them is important to ensuring you retain their loyalty. In much the same way as staff will form views on an acquisition and will decide if it is positive or negative, customers will do the same. Understanding, appreciating and addressing any concerns is essential.

  • Contracts

What contracts are impacted by the acquisition of a business? Most commercial contracts will have a clause dealing with what happens in the event of a change of ownership. Have you truly understood the implications, and have you made provision to avoid negative impact of a contract terminating due to a change of ownership? This is an obvious example of where a business will need to tackle implementation before a completion date as the impact of losing clients or a major client may throw the acquisition itself into doubt.

  • Online Presence

Both businesses will have an online presence, whether this is through the website, social media or review profiles there will be a presence and this will need to be managed to ensure that changes are communicated in a way that is positive and negative press or observations are minimised and ultimately depending on the ultimate goal whether that is to have one online presence or retain separation it is important to monitor online activity and be ready to address it quickly. The web is awash with positive and negative information and your role in an acquisition is to manage this information and control message to the best of your ability.

This blog provides a few of the areas to consider as part of an integration project and process and by no means is due to be a complete list of the action to take. The main point to raise is that if an acquisition is to be integrated it is almost always the case that the sooner this is completed the better, but it has to be undertaken with careful planning and caution to ensure the desired results are achieved.

If you face an integration project or are part way through and feel the input from an independent expert may assist you in achieving your goals, contact us now. You can all us on 0207 842 1825, email us info@mrgreenconsultancy.com or visit our website and make an online enquiry.