Mergers & Acquisitions

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At M&A Talk we bring you exclusive interviews with experts in business sales, valuations, mergers and acquisitions and more. We talk to the most experienced professionals in the industry to uncover their secrets.

Mid-Market Integration with Tony Benedict

Mid-Market Integration with Tony Benedict

Tony Benedict

Integration

Approximately half of acquisitions are unsuccessful. Why? A lot has to do with a lack of successful integration. How can acquirers improve their chances of success? Why is there a disconnect between the pre-closing team and the post-closing integration team? Listen as we take a deep dive into M&A integration strategy with Tony Benedict on the perils of post-acquisition integration.

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Guest Profile

In this episode, Tony Benedict joins us to talk about the world of M&A and the perils of post-acquisition integration. Tony has over 20 years of global and leadership experience in M&A as an Interim Executive for acquirers, targets, and as a technology and Board advisor. He straddles the business and IT worlds to help translate and monetize technology and transform companies in the high tech, manufacturing, life sciences, and healthcare services industries. Join us for an hour of in-depth conversation with Tony ranging across his multi-industry experience in the M&A world.

Tony shares his insights into accelerating integration and value creation, why employees matter as much as the customer, and his views on why M&A still has a high failure rate. Finally, he comments as a technology advisor, Board Director, speaker, and author of three books on business process transformation and multiple articles on healthcare innovation and digital transformation.


Highlights

  • Most executives have significant operating experience but lack post-integration experience.
  • Most investment banks aren’t involved in integration.
  • Integration planning is highly operational in nature and requires deep knowledge of operations.
  • Every integration is different for different reasons.
  • The start of integration planning is asking yourself why you are acquiring the company.
  • Third-party logistics (3PL) in logistics and supply chain management is an organization’s use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services.
  • Many experts conducting due diligence lack operational experience and could benefit from consulting with those who have operational experience to form a successful integration strategy.
  • Many acquirers don’t want to admit they are having problems post-closing with integration, and the role of integration in the success of acquisitions is often underestimated.
  • Always start integration planning with the people first.
  • It’s best to convince people to attrit (quit) as opposed to letting them go.
  • Judge the new team based on their performance during the first 3 to 6 months.
  • After people, you should look at the processes, and then the systems (e.g., software, ERP, etc.).
  • If the processes are broken, then the systems will probably be broken, underused, or not used strategically. Make the processes leaner first, then move them into an ERP (Enterprise Resource Planning) software program.
  • Finally, put together a governance structure, such as an integration management office (IMO). You should meet on a regular basis (i.e., weekly, etc.) while making progress on the integration plan.
  • The key to integration is starting with the people first.

Topics Covered

  • Why is there a disconnect between the pre-closing team and the integration team? [5:30]
  • What is the solution to the disconnect? [8:50]
  • Does the acquisition objective tie into the integration strategy? [9:50]
  • Why do some acquirers not form an integration strategy in advance? [12:40]
  • Does the acquirer usually pick the best of the best between the target and the acquirer and choose that operational process moving forward? [13:45]
  • What role do your core competencies play in deciding on an integration strategy? [14:50]
  • Is integration best suited to a waterfall or a lean approach? [15:20]
  • What role does due diligence play in integration? [17:45]
  • What are some of the challenges you encountered in integration in your acquisitions? [22:15]
  • Can you assess the quality of the team during diligence to help you determine a post-integration people strategy? [23:45]
  • What do you do when you find out the team isn’t a good fit? [24:45]
  • How do you prevent the rumor mill and employees being concerned about losing their job? [28:40]
  • How do you prevent people problems? [34:00]
  • What is next after people? [36:00]
  • How do you integrate the processes? [36:20]
  • How do you integrate the systems? [38:00]
  • Why do you look at the processes before the systems? [41:20]
  • What is next after the processes and systems? [44:30]
  • How often do you need to make changes to the integration plan? [46:00]
  • What is the key to integration, in a nutshell? [47:00]
  • Who should be involved in the integration? [47:55]
  • Should acquirers build an integration competence in-house or should they contract it out? [48:35]
  • How long should the integration process take? [50:40]
  • Why do the systems take so long to integrate? [51:20]
  • Is integration sequential or concurrent? [51:40]
  • What are the four keys to integration momentum? [52:30]

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