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The Man Who Sold the Web Blog | Tag Archive | Post-merger Integration (PMI)


Tag Archives: Post-merger Integration (PMI)

The Key to Maximizing Deal Value: Post-merger Integration (PMI) Roles & Responsibilities

8 Jul

For Post-merger Integration (PMI) to be successful, it is critical that we have clearly defined, appropriate, and comprehensive roles and responsibilities.

Post-merger Integration is a highly complex process. It requires swift action as well as running the core business activities simultaneously.  There is no one-size-fits-all approach to a successful PMI Process. However, careful planning focusing on the strategic objectives of the deal and the identification and capturing of synergies will help maximize deal value.

While it may be a highly complex project, a successful PMI may be achieved and greater deal value can be expected. Right from Day One of PMI, it is already important that the Buyer and Target have the right people in place.  The success of the integration project depends on leadership, project management capabilities, and selection of the right personnel to the work in teams/streams.

Roles & Responsibilities in PMI: Why the Need for Emphasis

So, what are the requisite PMI roles and responsibilities?  Clearly defined roles and responsibilities are a fundamental factor that can make a big difference between gaining deal success or failure.

The Integration owner, together with the Integration Steering Group plays a critical role in defining the integration path of the organization. In Leadership Development, their role in the First 100 Days is a fundamental factor in achieving success or failure.

  1. Integration Owner. The Integration Owner is a member of the Buyer’s management team. He/she is basically the owner of the integration phase. It is the responsibility of the Integration Owner to oversee the integration phase, as well as the transaction/purchase phase.
  2. Integration Steering Group. The Integration Steering Group is the governing body of the integration phase. The specific role of the Integration Steering Group is to supervise the work of the Integration Project Manager and the Integration Team.
  3. Integration Manager. The Integration Manager is the Project Manager. He/she is the one in charge of the day-to-day management of the integration. If the Integration Manager has little or no project management experience then active hands-on support is required from the M&A Project owner.
  4. Integration Team/Stream. The Integration Team/Stream consists of an Integration Manager and its members. Streams are areas of the organization split into district parts but which are aligned to the overall strategy. Integration streams are often decided after the first appointment of the Integration Manager. Each stream is often headed by the Integration Stream Manager.

The Critical Role of the Integration Stream Manager

The Integration Stream Managers are selected from among the Buyer’s managers. They play a vital role as they are responsible for the development and implementation of detailed plans.

The Integration Stream Managers act as the team builder and introduce the team members to each other.  They ensure that the team members have all the information and tools needed for the task. They clarify goals, targets, timetables, reporting, and other important matters relative to the integration.  As Integration Stream Managers, they are expected to ensure that everyone in the team understands the goals the same way and is committed to making it happen.

In certain circumstances, it is possible that the Integration Stream Manager may also be Target’s manager.  This happens when Target’s manager has specialized knowledge or attributes necessary for the integration.

Undertaking the Post-merger Integration Process the right way can maximize deal value. On the other hand, it can result in the greatest potential loss of value when not done right. Being able to select the right people is the key.

Interested in gaining more understanding of the various Roles and Responsibilities within PMI? You can learn more and download an editable PowerPoint about Post-merger Integration (PMI): Roles & Responsibilities here on the Flevy documents marketplace.

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How to Maximize Deal Value in Post-merger Integration (PMI): The PMI Process

1 Jul

Post-merger Integration (PMI) can be complex, time-pressured, and unfamiliar for most organizations. It is a highly complex process. It requires swift action as well as running the core business activities simultaneously.  There is no one-size-fits-all approach to a successful PMI Process. However, careful planning focusing on the strategic objectives of the deal and the identification and capturing of synergies will help maximize deal value.

It is inevitable that some elements of information will be withheld from a Buyer pre-deal. Further, not all the synergy benefits originally identified in the deal will prove to be achievable. The foremost challenge for management at the onset of the PMI process is to identify how value can be captured from the newly combined organization via synergies and cost savings.

Hence, undertaking the PMI Process requires a clear roadmap that will take the post-merger integration journey toward a more strategic and effective direction. This is where Strategy Development comes in.

The 5 Core Components of the PMI Process

Organizations must have a good understanding of the integration process to ensure that target results are achieved and that expectations are met. There are 5 core components of the PMI Process organizations must follow to make the process more successful where the deal value is achieved and realized.

  1. PMI Structure. This is the first component of the PMI Process that establishes the stages of the integration process. It consists of sub-projects that take place before and after the closing or change of ownership.
  2. Management Alignment. The second core component, Management Alignment is focused on aligning top managers of both Buyer and Target. For the first time, top managers of the Buyer and Target become part of the same organization. It is at this stage wherein there is a change of priorities and commitment of top managers. The new management team must be aligned and committed to the same goal.  This way, they convey the same message to the new organization.
  3. First 100 Days. The First 100 Days is where the PMI Process starts focusing on making changes. The First 100 Days is the maximum period people can live with the uncertainty regarding the new organizational structure and decision on redundancy. This core component is highly critical as this paves the way towards a smooth transition to a new organization.
  4. PMI Project Management. The fourth component is focused on budget planning and management. It is at this stage wherein the preparation of the first estimates of integration costs during the transaction or purchase phase is undertaken.
  5. Kick-off Meeting. The fifth or final core component is the Kick-off Meeting. Starting teamwork is its main focus. Participants are brought up to speed on events in both predecessor entities and the joint strategy.  This is the avenue to provide instructions, guidelines, and templates. A Kick-off Meeting is typically a 2-day session including the time to socialize.

The Red Flag Warning in Post-merger Integration

When going through Post-merger Integration, we can expect some red flag warnings.  These are disturbances that may warrant such a red flag warning.  As organizations go through the deal, there will be critical issues on personnel and customers that will arise.

One critical issue that may raise the concern of the Integration team is the possibility of losing your key personnel. Losing your key personnel can cause a dent in any organization. At this point wherein integration is happening, the more the support of the key personnel is of utmost importance. Losing them would be a great loss.

Aside from red flag warnings, there will also be key considerations organizations must take note of during integration. Being aware of these will prepare them as they move on forwards to achieving a successful deal.

Interested in gaining more understanding of the PMI Process? You can learn more and download an editable PowerPoint about Post-merger Integration (PMI): PMI Process here on the Flevy documents marketplace.

Are you a management consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

How to Achieve GREATER VALUE in M&A? Do the Fundamentals of Post-merger Integration

28 Oct

Going into a Merger and Acquisition (M&A) is never an easy task. The process of M&A is like trying to complete a large puzzle when your right hand and your left hand have never worked together. In fact, Mergers and Acquisitions revolve around a plethora of moving parts. Going into this direction can be complicated. Suddenly, there are two companies and additional stakeholders that now need to fairly and seamlessly work and communicate together in order to bring the deal to completion.

But what happens after the deal has seemingly crossed the finish line. When this happens, there is the Post Merger Integration or M&A Integration. After the financial transaction, Post-merger Integration (PMI) is the process of bringing 2 or more companies together with the aim of maximizing synergies to ensure that the deal lives up to its predicted value. However, easy as it may seem, there are problems in Mergers and Acquisitions that can often cause deals to fail. Companies do not want a deal that only looks good on paper or results in a semi-integrated company.

To be able to live up to predicted value, a Post-merger Integration Planning must start right at the beginning of the deal.

Understanding Post-merger Integration

Post-merger Integration (PMI) or M&A Integration is the process of bringing 2 or more companies together.
It is what happens after the deal has crossed the finish line. In the PMI, our objective is to maximize synergies to ensure that the deal lives up to its predicted value.

In starting the PMI, Post-merger Planning should be done at the beginning of the deal and must be established before the deal closes. Any problems that may arise in Mergers and Acquisitions must be dealt with immediately since failure to properly address them can cause deals to fail or unable to extract true value from deals.

The 4 Types of Post Acquisition Integration

It helps a lot if we have a good understanding of the different types of Post Acquisition Integration to better manage deals.

Understanding the different types of Post Acquisition Integration will give the organization a better idea of what direction to take when it comes to Mergers and Acquisitions. It is best for companies to have a good hold of where they want to go and want to achieve taking into consideration current conditions and business considerations. When these are all laid out, greater are the chances that the right type of Post Acquisition Integration is undertaken.

Taking the Right Step Forward to Mergers and Acquisitions

Taking the road to Mergers and Acquisitions requires organizations to keep away from common mistakes. This is possible with the use of M&A Integrated Solutions.

The use of M&A Integrated Solutions and Post-merger Integration Tool allows organizations to increase the chance of a successful Post-merger Integration. With the use of these tools, users are enabled to plan properly from day one and the very beginning of the diligence process. Teams have access to all files and data prior to the deal closing to spot areas of concern and plan accordingly. Further, users can set cross-stream dependencies across multiple functions.

With M&A Integrated Solutions, it facilitates the use of a better process that maximizes deal value. Organizations just need to have a good understanding of the Post-merger (M & A) Integration Process to get the greatest value.

Interested in gaining more understanding of Post-merger Integration? You can learn more and download an editable PowerPoint about Post-merger Integration (PMI) Primer here on the Flevy documents marketplace.

Are you a management consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.


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