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Post-Merger Integration

We have all heard the cliché that when you merge with another company that the sum is greater than the parts (i.e. 1 + 1 = 3). Then why is it that 70% of mergers and acquisitions fail to achieve the expected value outlined in the deal? So, can you make 1 + 1 = 3?

We believe that mergers and acquisitions can result in positive results if you deliberately and actively manage the integration of the combining entities. So, if you are faced with some of the following questions, we believe we can help.

  • We are about to acquire (be acquired) another company, what should we be doing to prepare for the integration?
  • We just announced a deal – what happens now?
  • How do I ensure we don’t lose any momentum after we announce the deal?
  • What is the best way to approach post-merger integration?
  • Our previous acquisitions still aren’t really integrated and it’s become a mess, what should we do?
  • How do we ensure our cultures align and people don’t leave in frustration, resulting in 1 + 1 = 1?
  • How do we break down the ‘us’ versus ‘them’ mentality?
  • How do we determine what the best practices from each company are and use them going forward?
  • How do we achieve the synergies outlined in the deal?
  • My people are worried, how do we manage this integration so that we retain our best staff?

Two things can destroy any relationship: unrealistic expectations and poor communication.

Someone Wise

Our Perspective

Stack’d Consulting’s Integration Approach Illustrated.

Our approach to Integration

Once a deal is announced the initial focus is typically on identifying who will manage the integration between functions across the organization. While we appreciate that project management is critical during an integration, we believe that strong leadership is more important to successfully execute an integration.

Here’s what we mean…

For an integration to be successful, you must:

Provide Organizational Direction

Have the leaders confirm and validate the strategy, how you are you going to operate, and the synergies you expect to achieve by combining the two entities. Leaders need to have clarity on these three items and communicate this with staff so that people know where they are going and what is of highest priority.

Lead Integration Execution

Leaders need to successfully put in place the building blocks to successfully direct the integration activities. These building blocks include:

  • Having a deliberate plan to identify cultural differences, establish what the combined organization’s culture should be, and what behaviors the leaders are going to actively demonstrate to reinforce the desired culture.
  • Managing the change and communicate, communicate, communicate. You cannot over communicate during an integration especially when the majority of your employees will be feeling fear, uncertainty and doubt and are trying to figure out “how does this impact me”.
  • Identifying an overall integration leader and governance structure to manage the execution of the integration plan.

Actively Pursue Synergies

Almost every deal has some sort of expected benefit to justify the deal (i.e. 1 + 1 = 3). The realization of that value and achievement of those synergies will not happen on its own. Leaders need to validate synergy targets and have a deliberate plan to achieve them that holds individuals accountable.

Our Services

The services we offer in support of post-merger integration where we can deliver amazing include:

Plan & Execute an Integration

We will help your leadership team structure, plan and manage all aspects of an integration. This typically includes:

  • Planning and facilitating key working sessions with the combined leadership team to validate and confirm the overall integration objectives, short and long-term strategy, and how the new entity will operate in the future
  • Defining organizational structure and leadership accountability
  • Actively managing communications and change management
  • Assessing and integrating cultures
  • Establishing integration governance and planning
  • Performing functional area analysis and integration
  • Conducting synergy identification and capture

Cultural Assessment & Integration

Getting cultures to align is often one of the biggest hurdles to either assess prior to a merger or immediately after the deal has been done. We have a structured approach that not only helps quantify cultural differences, but also assists in prioritizing the discussion on what leadership behavioral changes are required to modify an organization’s culture.

Integration Assessment

You have taken on the ambitious task of integrating the organization without outside help, and you would like a quick assessment to see if you are on track or need help for a specific issue. By leveraging our prior experience and integration methodology we can provide an early evaluation of whether your team is on a path to successfully drive and manage the integration.

Our Results

Illustrative examples of our results with clients include:

  • Impulse Merchandising Market Leaders

    Stack’d was engaged by a U.S. based private equity firm to lead the integration of two acquired platform companies into a single operating entity. The two companies were the co-market leaders in impulse merchandising across North America, collectively representing greater than 85% market share. To add to the complexity, the organizations were both family businesses, fierce competitors, with the respective founders still leading the day-to-day operations.

    Stack’d worked with the leadership of each organization and the private equity partner to define and implement the new organization’s strategic priorities, future state operating model, leadership accountabilities, and organizational structure and culture. We also established and supported a client-led integration office which planned and executed the integration activities, managed communications, and orchestrated change across the organization. 

    The integration was a clear success, resulting in steady EBITDA growth during the integration and exceeding the targeted synergy goals across all aspects of the business, only made achievable by carefully ensuring that a keen eye remained on the customer throughout the integration process with no disruption to current operations.

  • Government Innovation Body

    A provincial innovation body engaged Stack’d to help prepare for the integration of four separate corporations into a newly consolidated entity. Merger success was of significant strategic importance to provincial leaders, so advanced work in designing the new organization and planning the integration of the functional work streams was critical.

    To assist, Stack’d facilitated the development of a target organizational structure and transition plan to combine the four organizational structures into one. Given the advanced stage of this work, it was important that the recommendations were flexible to allow further refinement as the consolidation progressed. In addition, Stack’d provided support to the Project Management Office leader to help with tracking transition activities, managing interdependencies, reviewing deliverables, and developing communication materials and status reports for transition stakeholders, including the Board of Directors. 

    As a result, ‘Day-1’ of the new organization was a success, having implemented the initial phase of the organization design and successfully launched the transition plans for the functional work streams.

  • Workforce Accommodations Management Company

    Our client, a global workforce accommodation specialist on the verge of acquiring a significant competitor, required services to prepare for day-one and support the integration and transition of operations. Although the Executive team had extensive merger and acquisition experience, it recognized that this merger was complex in nature and that a well-defined plan led by an effective program management office (PMO) was required to accelerate the transition and realize the substantial synergies expected.

    Stack’d was engaged to support the PMO and integration work-stream teams to define and execute all required integration activities in a coordinated, timely fashion, while driving the development, implementation, and tracking and reporting of expected synergies resulting from the integration. As a result, the integration objectives were successfully achieved, and the organization was on target for meeting and exceeding its synergy targets.

  • Oil Field Services Company

    Two competitors in the oilfield service industry were considering merging and unifying under a new name. Although the executive had acquired and integrated companies before and brought a wealth of experience to the table, they recognized that this merger was particularly complex given it was a merger of equals and the demands on leadership to focus on current business operations.

    Stack’d was engaged to help the combined leadership team in advance of ‘Day-1’ to help them navigate through the strategic issues facing the new organization, including setting organization direction, forming an effective leadership team, and establishing strategic priorities. In addition, Stack’d assisted the Integration Office leader in the preparation of preliminary integration plans for the various functional groups that would be merged after ‘Day-1’.

    In the end the two organizations chose not to merge based largely on the due diligence results, but also due to discovering key differences in their business philosophy and organization direction.

  • Industrial Equipment Dealer

    An industrial equipment dealer made the decision to divest an underperforming business unit. Stack’d was engaged to confidentially develop a plan to manage the divestiture and its impact on customers, staff, operations, and markets.

    Our team worked with the client to develop and manage a detailed project plan to govern and report on the actions required to divest the business unit, while minimizing customer impact and transaction costs.

    The project resulted in a successful divestiture with minimal customer impact. The client viewed the divestiture planning and execution process as a success.

  • Non-Standard Auto Insurance Company

    A private equity firm engaged Stack’d to support the post-merger integration of an add-on acquisition to their platform company that focused on non-standard auto insurance.

    Working with the leadership of the two organizations, Stack’d developed a strategy, operating model and a new organizational structure. Given that the organization had two fundamentally different approaches to their business model, a structured assessment of the processes and culture was conducted to support integration efforts. In addition, a 100-day plan and integration office was established to oversee integration efforts.

    As a result of this engagement, the organization had an issue free Day-1, successfully integrated operations, and achieved targeted cost synergies as outlined in the deal.

  • Public Health Organization

    In order to continue to offer important services to the community, the Boards of two public health organizations agreed to integrate after one was faced with financial challenges.

    Stack’d was engaged to lead the integration, developing an overall integration plan, setting up and managing the integration office, supporting the execution of nine integration streams, and leading senior management through a series of key decisions to develop the operating model and organizational structure for the new entity. In addition, Stack’d conducted an assessment of the organizational culture and facilitated sessions with core leaders to identify the actions and behaviors to make the culture ‘real’.

    The integration engagement successfully positioned the organization to operate as one entity, which was recognized and appreciated by both the current and outgoing Executive Directors, and the Board members from both organizations. The organization’s services not only continued, but are now well positioned and help the new organization grow.

  • Oil Field Services Company

    An international multi-billion dollar organization acquired an Alberta oil field services company to support their desired growth in the Alberta oil and gas industry.

    Stack’d was engaged to define an overall integration governance structure, manage the integration office, and develop a 100-day plan to guide integration activities across 15 integration work streams. A key focus of the engagement was to work with senior leadership to develop a growth strategy that achieved the desired synergies, implement a new business model based on operational excellence, and restructure the organization to drive improved leadership accountability.

    The integration of the two business was deemed a clear success and is used as a case study to illustrate post-merger best practices. The organization continues to pursue growth through acquisitions.