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.
Sincerely,
Jim Geier
Human Capital Consulting Partners
phone:
215-244-8110