This document provides best practices for post-merger integration. It recommends moving quickly to establish a strategic framework, ensuring budget and resources exist for integration. Communication is key, with a formalized plan and steering committee. A detailed 100-360 day integration timeline should be formulated, measuring performance against benchmarks and prioritizing high-value initiatives. Cultural integration is also important, requiring commitment from leadership and efforts to build trust across organizations through transparency and training.

1. +
Post Merger Integration
Winning Strategy for:
Post Merger Integration
Gnostam Consulting

2. +
It’s Like this…..
n Acquirers destroy value of acquired company in 60% of
acquisitions undertaken, [Academic data, Wharton School];
n BUT: Winning acquirers put right M&A strategy in place,
especially in cross border acquisitions.

3. +
Help!

4. +
Best Practices
n Move Quickly: Change is expected!
n Establish Strategic Framework for Decision Making: Articulate what is NON NEGOTIABLE
n ƒ RESOURCES: Ensure budget exists for Integration
n ƒ CULTURE: Identify resistance in organization
n COMMUNICATE: Formalize communication through steering committee, communication plan
n ACTION: Formulate a 100 and 360 day Integration, with detailed time line
n MEASURE: Performance Versus Benchmarks
n PRIORITIZE: Make recommendations to Steering Committee for any changes of priority
n FOCUS: On high NPV with high probability of success, [Decision Trees]

5. +
Basics

6. +
ARTICULATE INDUSTRIAL LOGIC

7. + EXAMPLE OR TIME LINE USED IN PEPSICO

8. +
DO NOT SILO!!!

9. +
Do it Right, in Right Language
Steering Committee
Sales,
Cross
Functions
Product
Develop
ment
Finance Operations Quality IT, Back
office
Integration

10. + RESOURCES
Acquiree Acquiror Co.
Overlap area:
This group has highest
Capabilities;
Empowered for change;
Drive Accountability
through steering committee;
Supported by external
Advisers.
Tax
External
Advisors
These groups focused on day
to day jobs
Legal
HR, Other, benefits IT integration

11. +
Cultural Considerations
n Cultural considerations are
80% of reason integration fails.
Must commit to cultural
integration at highest level of
organization;
n Cultural integration involves all
areas: it is not a one time. It is
complex because building trust
in organizations that are
undergoing change is very time
consuming and complex;
n Can only be done in teams
including both managements;
n Take time to explain,
communicate, train, educate,
both ways! Be transparent.
Culture re-inforcers:
1. Develop clear policies;
2. Goals… Measure them!
3. Recognize achievements;
4. Invest in staff, selection of staff;
5. Invest in training;
6. Create dedicated events;
7. Reward leadership, conflict
resolution
8. Emphasis on communication
9. Improve physical environment
10. Reorganize continuously.

12. +
COMMUNICATION BREAKDOWN
n Avoid it! It is very expensive. Shareholders pay for it!
n FOCUS ON TELLING A STORY. Be accountable.
n Target personnel may have been highly disappointed in past,
career progression blocked….
n Introduce broad strategic goals, then focus on implications
for functional areas;
n Impact of integration is often burn-out of most talented staff!

13. +
EXECUTION
Also depends
Critically on type of
Acquisition…
Raid more risky, than
Co-operative situation:
see Acq Posture below.
§ Acquisition Postures
Rescue Collaboration
Contested
Situation
Raid
Cooperative Adversarial

14. +
Execution Template
Integration
Measures
Operation
Measures
Process
& Cultural
Measure
Financial
Measures
Business Mgt
processes
redesigned and
implemented?
Are integration
events supports
change?
Are we
achieving
deal
synergies?
Day to day
operational
metrics
achieved?
Benchmark against metrics and “timeline” implementation

15. +LEGAL
n Earn-out formula’s, clawbacks…. The hard stuff..
n Revenues, gross margins, not EBITDA.
n Time frame, months not years…
n Post closing tax effects.
n Incentivize decoupling from “bridge systems”;
n Penalties for delays.
n Sign by close of deal;
n Incentives, stock options, bonuses, relocations, role
change, departures from company.
Definitive
Agreement
Transition
Services
Employment
Agreements

16. + Bio & Contact
n Philip has 30+ years of consulting
M&A experience with PWC, IBM,
various investment banks, and with
his own firm Gnostam since 2004;
n 30 + years of global cross border due
diligence merger integration;
n Cultural integrations and fluency in 5
languages;
n Industries, Finance, Insurance,
healthcare, Maritime, Energy, IT and
Data Mining.
n pcorsano@gmail.com
n Tel +1 206 384 0069
Education: BSc Economics University of
Bristol
MBA London Business School
Decision Sciences Stanford
Marine Captain, 1600 Tons
Oceans