“Now it’s your problem”
18 FEB 2017
“60% of M&A destroy
Research of 2500 deals by L.E.K
“companies spend more than $2 trillion on
acquisitions every year. Yet study after
study puts the failure rate of mergers and
acquisitions somewhere between 70% and
Harvard Business Review
Ebay’s (EBAY) purchase of Skype
for USD 2.6 billion, later to be sold
at just USD 1.9 billion
Microsoft writes off $7.6B,
admits failure of Nokia
Yahoo Hints That $1 Billion
Tumblr Acquisition Was Mostly
business unit with
business unit with
and system with
Finance, HR, IT
Brand Separate brands A brand under an
of a big brand
Distinctive culture Separate culture
Joint culture with
No integration Full
When is the right time to tell
Announcement message targeting
customers and employees
Turn anxiety into opportunity
When to do if a major customer walks
away two months after closing?
The key to successful integration
is in the deal structure
1. Selling shareholders motivation
1. Why they sell?
2. Are they involved and will they stay?
3. Earn out
4. Stock swap
2. Legal protection
1. Are there assets outside of the deal?
2. Reps & Warranties
3. Change of control procedure
When is the best time to put together a business
plan/budget for the new business unit?
Operational symptoms you don’t want to
acquire another company
1. Do you have company KPI dashboard? Do you review it on the monthly basis with you
2. How many times KPIs from the dashboard didn’t tie up with financial reporting?
3. Are you satisfied with your budgeting process? ERP system?
4. Is your HR strong? Do you measure the health of your organization (engagement, eNPS)?
5. Can a new person tell who is doing what based on your org chart?
6. Do you have clear purpose, goals and strategy? When was the last time you reviewed it?
7. Are your corporate values defined and embraced?
8. Does your executive team have enough time to consumer their vacations?
Integration is the biggest operational challenge you’ve see so
1. Dedicated project manager
2. Project plan and check list
3. Daily status meetings in the first week, weekly status
meetings going forward