The document discusses successfully integrating mergers and acquisitions. It notes that mergers and acquisitions occur for reasons like reducing costs, improving market share, and enabling new investments. However, many acquisitions fail to meet expectations due to issues with culture, organization structure, integration of technologies, and lack of focus on strategy. Successful integration requires addressing people, processes, strategy, technology, organization, and performance management. It is important to identify synergies and objectives, develop an integrated organization structure and customer service model, and reengineer processes.

1. Successfully Integrating Mergers and Acquisitions
The Wholesale Distribution sector is a highly fragmented market and fragmented
markets tend to be prime candidates for mergers and acquisitions. Additionally,
the competitive environment favors companies with critical mass and critical
competencies to maintain competitive advantage. Mergers and acquisitions
occur for a variety of reasons including:
• Creation of operating synergies resulting in lower costs
• Reduction in competition and improving market share and margin
• Improvement in service capabilities through achieved synergies
• Increase in leverage over suppliers through volume purchases
• Enabling investments in selected technologies not possible before
• Enhancement to employee quality of life issues through improved benefit,
training, streamlined operations and continuing education programs
• Reinvestment in infrastructure and organization resulting from achieved
synergies
Mergers and acquisitions can significantly improve shareholder value if done
successfully. However, it is important to note, that many of the acquired firms
are sold soon after acquisition and an even higher percentage fail to meet
managements expectations for the merger or acquisition. Some of the reasons for
not meeting expectations are:
• Inability to reengineer the merged companies to achieve synergies
• Cultural issues that persist long after the integration of two companies
• Failure to implement the “right” organizational structure and obtain
employees who may feel “left out” by the merger
• Inability to integrate different technologies
• Inordinate amounts of management time spent on the merger or
acquisition resulting in poor tactical execution
• Failure to develop a clear and concise strategy for the merged companies
• Lack of focus on revenue enhancing and market share opportunities due
to attention given cost reduction opportunities
• Insistence on doing things “my way” instead of seeking out “best
practice” from both companies
• Rushing the planning and strategic phases of the merger resulting in poor
execution
It is important for merged companies to realize synergies over a relatively short
window. Markets are dynamically changing and timing is often critical to

2. achieving expectations. A rapid change in market conditions requires rapid
changes within an organization to respond. Companies in the process of
integration may not see these changes occurring or may miss other opportunities
because of the attention given to the merger itself.
Successful merger integration encompasses the major components of a corporate
operation model which include people, process, strategy, technology,
organization, customer service and performance management. More specifically,
the keys to successful integration include:
Strategy & Performance
• Identification of a clear mission and vision for the merged companies
• Articulation of key objectives for the merged companies over a 3-5 year
time horizon
• Decomposition of the corporate strategy down through the departmental
level for the merged organization
• Identification of key synergistic opportunities and development of
realistic budgets with implementation objectives defined
• Development of performance measurement criteria set around the new
organization
People & Organization
• Identification of personnel retention objectives
• Identification of key personnel and approach to key personnel
communication
• Development of the new organization structures and assignment of key
personnel to organizational positions
• Sensitivity to cultural issues and development of an approach to promote
team work and resolution of issues before they erode morale
• Creation of communication channels to resolve employee conflict, coach
for performance improvement, improve awareness and mentor employees
for continued growth within the new organization
• Development of learning and feedbacks loops within the new
organization which result in continuous improvement and promote
success
Information Technology
• Creation of the Information Technology strategy with clearly defined
objectives over a two year period

3. • Identification and development of an approach to integration which
includes not only the hardware, software and communications
requirements but the training and logistical requirements and inherent
barriers associated with technological change
• Identification of key processes likely to be impacted by technological
integration
• Documentation of a project plan identifying key requirements for
successful implementation including resources needed
• Definition of the processes required to respond to user and organization
issues arising from the integration
Process and Customer Service
• Definition of the integrated customer service model
• Identification of synergistic opportunities resulting from the combination
• Creation of an integrated budget and identification of specific
performance criteria
• Reengineering of key processes to provide the synergies expected
• Developing measures and incentives to support achievement of the
desired synergies
• Testing and refinement of the integrated processes and customer service
model
• Creation of a feedback and learning loop to support growth and
consistently improve productivity
The GARR Consulting Group can assist you will a successful transition to an
integrated organization. This transition may include:
• Prioritizing synergy opportunities
• Development of performance measures and tracking of synergies
• Articulating the combined business strategy
• Developing a “people” plan aimed at retention and cultural integration
• Building a combined customer service model
• Mobilizing teams
• Identifying “best practices”
• Implementing change
• Creating a communication plan
• Reengineering business processes
Please call Pat Jones at 256-682-3510 to discuss ways in which we might assist
you successfully integrate your organization.