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

CHAPTER 3

Making the Business Case for Integration

In this chapter, you will learn the following:

• Common rationales and reasons for M&A activity.
• The most difficult areas of integration activity.
• The most common causes of integration failure.
• The integration challenge and how to make the business case for integration support.
• Integration success factors.

Completing a merger or an acquisition can take months, if not years. It can be an all-consuming endeavor that tests the resources and stamina of management teams and the legions of consultants and financial advisors involved in the process. It can also be expensive: the acquisition costs, the time and effort expended to complete the deal, and the legal and financial due diligence costs.

M&A activity is somewhat cyclical, and there’s plenty of research available on that subject, if you are interested. M&A activity is typically driven by the desire to accomplish some or all of the goals discussed in this chapter.

HOW TO IMPROVE PERFORMANCE

The motivation for M&A activity is that acquiring firms seek improved financial performance and shareholder value. Following are some supporting business benefits that are typically considered to improve financial performance and which will help explain some of the why behind the M&A deals you may be lucky enough to help integrate.

Synergy

Synergy management is a big topic and is touched on later in this book. Synergy generally falls into two main categories: cost savings and revenue enhancements ...