The key to effective acquisition integration is to integrate where it matters. Bain works alongside clients to make deals pay off. Historically, Bain-supported merger integrations have created 18% more shareholder value than the average market deal.
Mergers and acquisitions can deliver great value if well conceived and properly executed. Successful integration–the key to avoiding the risks of a merger or acquisition and to realizing its potential value–is always a challenge. It is complicated by the simple fact that no two deals should be integrated in the same way.
It is critical for companies to align their merger integration processes with their deal types and deal theses:
Having worked on hundreds of integrations together with our clients, in our experience the key to effective acquisition integration is to integrate where it matters:
- Tailor the integration to the nature of the deal
- Align your integration thesis with the deal thesis, clearly spelling out if this is a scale or a scope acquisition.
- The answer to the scale-or-scope question affects critical decisions you need to make early, including what should be integrated and what you should keep separate.
- Deals undertaken to grow a company's scale typically require a comprehensive integration, whereas in deals that expand the scope of the business, integrate selectively to preserve the value of the acquired business.
- Balance the required focus on getting a few critical factors right with the need to get the integration "mechanics" right
- Nail the short list of critical actions that drive value to deliver on your deal thesis.
- Ensure rigorous execution on the long list of integration tasks every deal requires.
A few essential guidelines can make the challenge far more manageable and lead to the right outcome–a successful M&A integration. Please see our ten integration best practice lessons, which we developed from our experience having worked with clients on hundreds of successful integration programs.