The process of post-merger integration (PMI) should have already started when the M&A strategy is being determined. Ideally, having standards and procedures in place for post-merger integration long before you actually do an integration. The high-level integration plan and business case need to be in place as a standard procedure in the business. As part of the business, case synergies need to be determined in an abstract form and they need to be allocated to the various workstream owners.
Download the process of post-merger integration (PMI).
Download the checklist for post-merger integration (PMI).
It may sound surprising, but for an organization of a certain size, (for example revenue > EUR 300 million or more) the post-merger integration planning should be included as a standard procedure for companies seeking to do an acquisition. Not only to be prepared for an acquisition or merger but also to be clear on what benefits an acquisition can bring. This can help the organization in improving its current position and strategy and understand the business drivers and possible synergies better. These are the items that normally need to be prepared as part of the M&A strategy phase:
In the due diligence phase, the assumptions of the M&A strategy are tested. Also, the available plans of the post-merger processes are checked and updated for accuracy. The workstream owners perform their part in the due diligence process. They check and sign off on the synergies that they are responsible for and agree on a calculation method with the PMI integration managers or the financial team of the buyer. These are the main components of the due diligence (DD) process with a focus on post-merger integration preparation:
The pre-close specification is a separate phase that is specifically put in to prepare for an optimal PMI (post-merger integration) process. It appears in practice that companies that explicitly organize a pre-close specification phase have a more efficient post-merger integration process and gain significantly more synergies in the post-acquisition phase. These are the items that need to be reviewed before the actual post-merger integration process begins:
There are two stages in the post-merger integration process. The first post-merger integration phase is the one immediately after the closing of the transaction. This period can run up to 6 months. We want to separate between the two post-merger integration periods to stress that action is required from the first minute after an acquisition process. These are the items that need to be reviewed immediately once the actual post-merger integration process starts:
The integration process after a merger can normally run for many years. Hence, we feel that the integration plan needs to stick firmly to the agenda including after the actual merger or acquisition has been completed. These are the items that need to be checked after a period of 6 months or more following the start of the actual post-merger integration process: