Professor Clayton M. Christensen (et al.) states in Harvard Business Review that “Study after study puts the failure rate of mergers and acquisitions somewhere between 70 % and 90 %”. However, this doesn’t undertake the fact that corporate performance has potential to shoot sky high through successful M&As. We at Montell & Partners have the experience of successfully working with M&A and integrations for over 15 years in Europe, Asia and Africa with great results, meaning that targets have been reached and/or exceeded.
By following three logic steps the success of the integration will be within your control at the same time as risks are minimized
1 Start by clearly defining the wanted long-term position
It may sound strange, but in the early stages of M&A it’s common to find that the wanted long-term position is unclear and undefined. Make sure to define, secure and anchor the wanted position and establish a detailed business case within the organization.
2 Use the negotiation phase to validate and agree on wanted position, goals and future organization
Include wanted position in Sales Purchase Agreement and utilize success fees connected to the outcome.
3 Perform a strategic due diligence and use this phase to develop a first draft on the business plan, including integration activities
Perform a strategic due diligence and thereby reduce risks of failing in a later stage. By anchoring the joint future business plan with existing organization, it can be aligned with the wanted position before signed contract, which saves valuable time.