Harvard Business Review recently published an article entitled Are You Really Ready for an Acquisition? which stated that assessing the operations of a company BEFORE the deal is a major factor in having a successful transaction.

Too often M&A teams become too focused on the numbers - obviously an important piece of the transaction but it is not the whole picture.  HBR suggests the following to start your process:

First, create a high-level picture of what you want a combined company
ideally to look like one year after a successful integration — not just in terms
of finances, but also in regard to operational practices, strategic initiatives,
organizational structure, and culture.

What does the new organizational structure look like?  How will you support the existing clients of both companies?  What processes do you need to integrate?  What are all the systems being utilized by both companies - which will stay, which will be eliminated, and which need to be combined?  What information do you need to extract before you shut down an existing system - and what will you do with it?  What is the culture you want to create in the combined company and how will you integrate the teams?

There are many logistics to think through in addition to the larger overall strategy, but the more planning you are able to do in the early stages of the deal, the smoother the transition for your employees and your clients.  Companies bring in consultants to handle the financial aspects of a deal without a second thought - bringing in an expert on the operations side can pay huge dividends as well. 

UpperLevel Solutions has been through M&A transactions on both sides of the deal and has developed a methodology to help you think through the operational strategy and logistics to support your existing management team.  Contact us today to find out how you can benefit from an operational assessment in your due dilligence phase.

Debbie Millin is President of UpperLevel Solutions - a Boston-based firm offering  part-time and interim Chief Operating Officer services, operational assessments and executive project leadership.



04/22/2013 2:48am

Are you really ready for an acquisition? This is an inspiring question. Firstly it is necessary to conduct a needs analysis. Do you have dedicated and experienced human capital to deal with acquisition. Then what is it you want to acquire? When do you expect delivery of what has been acquired? In this regard we also need to bear mind that customer satisfaction triggers the word of mouth as a marketing tool before business networking can be excelerated to an informal cafe or restaurant meeting which will then end up in a formal boardroom meeting. Newly absorbed human capital needs to undergo an induction and be informed of the organisation culture,policies, vision and mission. Secondly we need to consider the business continuity management as a wagon of future adaptation and change management. Understanding previous socio /economic dynamics can also serve as a foundation and future forecasting.

After consideration of at least some of the above discussion one can then tell if his/her organisation is ready for an acquisition.

Thank you.

James Grebey
02/16/2014 6:29pm

You may have a good attorney and CPA who can follow the principals of law and accounting but what defines the requirements of an effective operations due diligence? Check out a book titled Operations Due Diligence published by McGraw Hill

11/12/2014 8:10am

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