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Post-Merger Integration Checklist

Updated: Feb 27, 2023

Do you have a post-merger integration (PMI) plan and checklist? Who oversees leading the PMI team? What are the respective PMI milestones? Post-merger integration is as much a part of the M&A life cycle as due diligence, transaction approvals, and the final contract signing. You should start planning as soon as you decide to buy a business.

If you have no plan for the target company, you could pay the wrong price and not be ready to manage the integration. Schedule a couple of days planning right at the start. At the latest, start building a full integration plan around one hundred days before you believe the deal will take place.

The case for developing a comprehensive PMI checklist

Mergers and acquisitions are hard enough already. Failing to have an adequate PMI checklist will result in additional problems that might be dismissed as a culture clash. The reason people come down to culture and communications is that they are used as excuses when things go wrong. Rather than admitting they have done something wrong or that they had a bad strategy, people talk about culture. It is more important to think and plan the integration strategy for the companies, the products, and the people.

A detailed PMI checklist will give direction from Day 1. It will define the roles of each employee to avoid uncertainty and will provide a timeline on when the board and management can expect to have integration complete. A PMI Checklist is an invaluable document that should detail each of the steps to be taken to promote the seamless integration of the merging entities.

As an experienced business broker who has brokered countless of mergers and acquisitions, here are Scott Ker's tips on how to establish a thorough PMI checklist.

1. Delegate responsibility to a designated PMI taskforce

It is not wise for the board and management to attempt to oversee the PMI by themselves. Instead, someone with the necessary experience, expertise, and influence should be selected to manage this integral part of the transition. Such a person and their team will make up the PMI taskforce. They will carefully study the merger and acquisition details, company cultures, and resources to draft a robust PMI strategy. Included in the plan of action should be key integration milestones, intended form of communication with the board, and when they hope to have integration completed.

2. PMI Taskforce should establish a new hiring policy

In any merger, the biggest challenge is always the integration of human resources because the people who are coming in have a lot of apprehensions. There will be a lot of upheaval at the beginning. The PMI taskforce must confront a problem head-on and get ahead of the situation by designing a new hiring process. This part of the checklist must detail how the newly formed entity will onboard new hires, prepare the documentation needed for their training, stipulate salaries, and bonuses to avoid any misunderstandings.

3. PMI Taskforce to formulate an offboarding procedure

The checklist must also include a detailed outline of how redundancies are going to be addressed. It is unfortunate, but there will be target's post-merger. Consequently, a clear-cut policy on how to deal with laying people off, moving them to other departments, or firing them is mandatory. Severance documents should be prepared ahead of time.

4. PMI Taskforce to integrate an IT system blueprint

Another essential element that should be on the checklist is the integration process of IT systems. This integration must be completed tactfully and with a sense of utmost urgency because operations must continue with as little disruption as possible. IT teams will need to be briefed about their new internal organisation and hierarchy. Once this is complete, the IT team must get to work establishing proper security access and securing the assets of all the new hires and former employees immediately. Businesses are most vulnerable at such a moment and cyber threats are genuine, so prepare accordingly.

5. PMI Taskforce to create communication and performance protocols

How will you know that integration is on track if you do not have performance indicators? On the checklist should be the creation of clear key performance indicators. These will help teams to know what their responsibilities are and what is expected. Inspire team leaders to have an open-door policy so employees can approach them for open and honest discussions. Great teams do not hold back with one another. They admit their mistakes, weaknesses, and concerns without fear of reprisal. Therefore, generate a performance review system, a communication plan, and a training and development strategy.

Looking for an experienced business broker?

Scott Ker is the leading business broker in Sydney. His advisory services include strategy development, divestment, mergers and acquisitions, consultations, and business valuation. Scott can analyse your business and present a variety of options to you, such as:

  • Executing strategies to improve business value

  • Identifying areas for improvement

  • Creating a valuation report for your business

  • Automating business processes

  • Working with you to formulate an appropriate exit strategy over a set period of time

  • Analysing data and providing advice

  • Selling your business now, or whether to wait for a more opportune time

  • Options to sell a portion of your business to a targeted buyer with the aim of freeing up some of your capital

  • Potential earnout options that could increase the value of your business over the next 12 months

  • Any other option that is suitable to you and your business

Every business is unique. Contact Scott today to review your business and discuss your goals, plans and options.


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