M&A is a process, a means to an end (that can often be summed up as “growth”). Integration is a critical phase of the process. A M&A deal does not end at the closing/completion. This is axiomatic knowledge, is it not?
“From our perspective, we, M&A lawyers are good in finding efficiencies, synergies and opportunities for optimization. It is our job in the context of a target’s due diligence to search for and identify inefficiencies, malfunctions, leakages. And naturally we can help buyers fix those efficiently, ideally early in the integration process, and not much later in the court room.”
“One question often bothers me at a deal’s closing: if integration is truly critical and the buyer naturally desires to preserve and increase the value of the newly acquired business, why is the buyer so rarely prepared to invest proportional resources (management time, budgets, advisor fees etc.) into the integration of the acquired business? In our experience, one in 10 buyers would retain its legal counsel to assist in the execution of the post-closing integration (and/or in its planning)”, says our partner Pavel Hristov, head of our M&A team. “You clearly would not want to damage the value of the target, so why not invest in integration, in making and executing a plan to preserve the actual value of the target’s assets? At least as much as you have invested in the acquisition; and bring in people and teams that are at least as good and experienced as your all-stars acquisition team.”
Bob Iger, former president and CEO of Disney has been widely praised for his dealmaking capabilities but in reality, as evident of his track record (Pixar, Marvel, Lucas Film) he excelled in integration. This podcast with Reid Hoffman at Masters of Scale is highly recommended.