Company Integration

How to Plan a Post-Close Company Acquisition Integration

Once you’ve completed the sign and close stage of acquiring another company, you’ll only have one step left—post-close integration. During this stage, you’ve already spent months talking with a seller and have finally closed the transaction, but you’ll want to avoid the trap of letting the acquisition lose steam. The acquisition team may need a break to focus on other work priorities, or they may be on to the next transaction. 

If you need a refresher on all seven steps, you can review them below: 

  1. Define your acquisition strategy 
  2. Identify target companies
  3. Build a business case and develop financial modeling 
  4. Due Diligence
  5. Deal Structure negotiation
  6. Sign and close
  7. Post-close integration

With some of your team redirected to other transactions or on a break, you’ll face a couple of important questions that will affect how well the acquired company blends into your overarching organization. For example, who will stay involved through the integration stage? What staff can be added to the integration team? To ensure you can answer these questions and meet all your acquisition goals, take a moment to review some of the best practices for post-close integration planning.

Tips for Post-Close Integration Success

When you hire a new employee, you have an onboarding process. Acquiring a company requires an onboarding process that’s just as rigorous (if not more!) at a much larger scale. The company has a culture, systems, and processes that will change once fully integrated. If you want to capture the momentum by engaging the people and building systems in a thoughtful and purposeful way, follow these tips below:

  • Talk about post-close integration before closing:
    • Align during due diligence – use the time spent talking with the seller to confirm the data and talk about integration before the M&A transaction is complete.
    • If we all assume we will be one team in the future, we should plan for that day proactively. Without a plan, most acquisitions start out doing things exactly like the previous day, and before you know it, a year has gone by, and the two firms are still working separately.
    • With a clear integration plan, the staff will know what is coming and when. This plan directly connects to the retention of the new staff. Being acquired by another company is a time in a staff member’s professional life when they can choose to stay with the group they have worked with under a new brand or leave to work for a competitor.
    • When the staff leaves, it depletes the value of your long-discussed business purchase in a people-intensive industry, so try to connect with the acquired company’s staff and make a plan that promotes open communication and an empathetic retention strategy.
  • Map out a timeline of activities and goals:
    • Who is responsible for each task?
    • When is the task due?
    • When is a given task considered complete?
    • What is the purpose of the task?
    • Who, what, how, and when do we communicate information?
    • How will we share integration files?
  • Celebrate milestones:
    • Simple, informal celebrations throughout the first year can be good for morale and remind everyone that they may not hear all that is going on each day, but progress is being made.
    • Let different staff communicate the milestones – staff from both the existing organization and the newly acquired company.
  • Changing the name:
    • For many, letting go of the company name and brand is difficult. It is in the best interest of all parties to be involved in changing the name if it is going to be changed. Why?
      • It is difficult to have one foot in the door for each brand and also be a cohesive, single team.
      • Clients care about who they work with, don’t confuse them by using different legal names.
      • Staff integrations generally happen faster if they become part of the new company in every way possible.
    • Allow the seller to use their brand with a tagline for a few weeks. Though, even the seller will celebrate when the company is under one identity not long after the acquisition transaction, as it is tiresome to continue explaining the merger story.
  • Reevaluate the team, roles, and structure at a certain point in the integration process:
    • Don’t assume you know the staff until you work with them. Some team members are rock stars in smaller firms but do not perform as well in larger firms. Other team members may be sleepers until they have a larger infrastructure to support their professional career development. The point is, there may be a place for everyone, but it might not look like it did in the past.

Turn to Thinc Strategy for Post-Close Integration Assistance

Alongside following the tips above, you can ensure the post-close integration stage of an ownership transition is successful by working with a mergers and acquisitions advisory firm. At Thinc Strategy, our certified merger and acquisition advisors are ready to help you tackle every step of acquiring another company and improve your market growth strategy. With our many available transition services, we’re sure we can help you meet all your acquisition goals in the most efficient manner possible.

If you need any help during any stage of the expansion through acquisition process, please contact us to schedule a complimentary consultation.