Human Capital Consulting Update
  January 23, 2007  

A recent article on CFO.com , “M&A Surge to Continue in ’07” by Sarah Johnson, noted that “the high levels of merger-and-acquisition activity that characterized 2006 will likely continue even grow through the first half of this year, according to the Association for Corporate Growth. . .Nearly half of the 1,230 private equity professionals, investment bankers, corporate development professionals, lawyers, and accountants who responded to an ACG and Thomson Financial survey in December said they expected merger activity will increase in the next six months. . .These dealmakers also predict that most of the 2007 mergers will happen in the technology, health care, and manufacturing sectors.”

In looking at all this activity that will take place, a key question we should all be asking ourselves is, “What does it take for a merger or acquisition to be a success.” In a recent article on Knowledge@Wharton entitled, “Why Do So Many Mergers Fail?” Wharton accounting professor Robert Holthausen, who teaches courses on M&A strategy, notes that there have been “hundreds of studies” conducted on the long-term results of mergers. He says that researchers estimate the range for failure is between 50% and 80%.

In an effort to ensure that companies have success in their merger or acquisition, Human Capital Consulting Partners has worked to create an eight-step process to assist companies with the integration process. The following article outlines a method that allows companies to follow a process that will get them to the finish line in a focused way.

An Eight-Step Process for Ensuring Your Acquisition and the Integration are a Success
How many times have you read about the perfect marriage of two companies? Analysts, bankers, and competitors all talk about how the merger of Company X and Company Y will be a boom for the market place. Whether they are shareholders, customers, or employees, the buzz in the industry is they will all prosper significantly one way or another and within 12 months.

And the answer is simple: the companies did not focus on the people side of the transaction. But seasoned professionals know that successful integration requires a sharp focus on human capital and culture.

"Don’t Impose Your Standards to the Absolute. When you buy a company, you are buying a performance record. This is a company that made it the way they were structured and managed, not the way you are. You want to sustain the culture that has achieved that record. Start imposing new people, new requirements, new values, and suddenly you don’t have what you thought you bought.”
From “Why Did You Make that Acquisition,” by James Kristie, Boardroom Briefing: Mergers & Acquisitions published by Directors and Boards Magazine, Fall 2006, original quote from “Seasoned Advice from the Merger Area” by Sam Segnar, Chairman and CEO of InterNorth, 1985.

To continue reading this article and learn more about the Eight Steps for Successful Acquisition and Integration, click here.

If we can be of any help in your merger or acquisition please don’t to contact us.


Jim Geier
Human Capital Consulting Partners

phone: 215-244-8110
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