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Day 5 – Buying a Business

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Day 5 – Buying a Business

CORPORATE FINANCE

Buying a Business: Post deal integration

In the final instalment of our series of guides looking at how to buy a business, our Corporate Finance team offer advice on how to integrate the acquisition into your business.

Integrating two businesses after an acquisition is often more challenging than bringing the deal to fruition. Many acquisitions fail to add value, and some actually destroy it, because the purchaser is not properly prepared for what happens next.

Achieving the completion often feels like the end point has been reached – but in fact it really means that you are at the start line and are waiting for the gun to fire.

It is essential to keep your own team motivated, while bringing in new people who might be used to operating in a different culture. As a result, personal tensions, uncertainties and misunderstandings can lead to lost productivity.

To counter this, you should prepare well ahead of completion for ‘day one’. This means identifying urgent tasks that should be set out in a detailed plan, and set in motion before the ink is dry on the contract.

The first 100 days after completion are absolutely critical. This is the formative period during which you can accomplish early wins, while laying firm foundations for the future.

Clear communication with all stakeholders is pivotal to the integration process. Customers, employees, investors, suppliers, and even, in some cases, the local community need to understand what the acquisition means for them.

The importance of sound leadership at all levels cannot be overstated. Decide well ahead of completion on key management positions. An effective integration plan must set out clear responsibilities and lines of reporting that are universally understood.  And, above all, it must be carried out.

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