Mergers & Acquisitions Integration Handbook: Helping Companies Realize The Full Value of Acquisitions

CHAPTER 2

Mergers and Acquisitions 101 and Assessing Integration Complexity and Risk

In this chapter, you will learn how to do the following:

1. Determine the integration scope and the projected level of support activity required.

2. Justify and secure integration resources.

3. Understand the integration challenge.

4. Lay the groundwork for your integration project.

MERGERS AND ACQUISITIONS 101

Mergers and acquisitions (M&A) is a big part of the corporate finance world. Every day, investment bankers arrange M&A transactions to bring separate companies together to form larger ones. Deal valuations can be in the millions or even billions of dollars. However, they all require some degree of post-deal support to make them work, and that is what this book is about.*

A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed.

The common scenarios for companies undertaking a merger or an acquisition include the following:

• A company cannot achieve double-digit sales growth organically.
• A company wants to take capacity out of the market (i.e., create industry consolidation).
• A company wants to expand its portfolio of products and services (i.e., create business diversification).
• The merger or acquisition is an opportunistic purchase.
• The merger or acquisition offers an opportunity to scale operations or consolidate them to achieve cost efficiencies.
• The merger or acquisition offers ...