Due Diligence and Integration

How to use due diligence and integration effectively to maximize your opportunity for success.

When done right, an acquisition can dramatically accelerate the growth of a company. However, experience tells us that deals often fall apart. Each year thousands of dollars are spent by buyers and sellers on deals that go nowhere. Here are 3 top reasons M&A deals fall apart. 1. Lack of Strategy – Failing to have a […]

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If you look at a due diligence check list, you’ll commonly find 3-5-year financial statements, employment agreements, leasing contracts, and past litigation on the list. While reviewing these documents is important, they only reveal part of the picture because they focus heavily on past performance. Thorough due diligence involves both looking backward and forward and […]

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Reviewing a company’s past performance is only worthwhile when you apply your findings to future results post-acquisition. With this future perspective in mind, here are five questions to help you consider the impact acquiring a prospect may have on your company moving forward. What do the past 3-5-year financials tell you about the company’s growth […]

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Did you know failing to move quickly during integration is one of the top reasons why deals are unsuccessful? Last week I had the opportunity to guest lecture on this topic at Professor Jeanne Wilson’s Executive MBA class at the Raymond A. Mason School of Business at the College of William & Mary. Many companies […]

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In October 2017, four months after closing its $4.48 billion acquisition of Yahoo, Verizon announced that all three billion Yahoo accounts had been hacked in 2013. On October 23, 2018, Yahoo agreed to pay $50 million in damages to affected users. As the acquirer, Verizon will shoulder half the costs. Obviously, most of us would […]

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After signing a letter of intent (LOI), there are still many steps to take before closing a transaction including due diligence, final valuation, negotiations, papering legal documents, and integration planning.   With many complex, specialized steps to move the deal forward, this period can be challenging to navigate, but also presents opportunities for strategic acquirers who have […]

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Integration proves to be one of the most difficult pieces of the M&A puzzle to get right. Buyers often try integrating the target’s systems into their own, only to realize too late they are destroying the very value they wished to acquire. Large food companies are learning this lesson from past mistakes and adjusting their […]

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One of the most common questions we receive is how to integrate two vastly different company cultures. There are many ways company cultures can vary. Often, we see a bigger company and a much smaller company, an entrepreneurial company and a process-driven company, or a tech-heavy company and one that is not. Sometimes cultures are […]

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Bringing two companies together through an acquisition is a massive undertaking that requires a significant amount of research and planning and dedicated resources to make it happen. It is the culmination of months (or perhaps years) of dedication and hard work. Unfortunately, far too often, companies struggle with integration and poor integration can detract or […]

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One of the biggest mistakes a leader can make is to begin thinking about integration after a deal closes. By that time, it is already too late, and you will be left scrambling to piece together a haphazard plan. After the transaction closes employees from both buyer and seller will be working side-by-side and systems […]

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Buyers often think using a due diligence checklist is the best way to ensure thorough due diligence on the target, but this may not always be the case. A generic list developed by outside “experts” may focus on non-essential issues while glossing over items that are critical to your deal. This is because each acquisition […]

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Getting both buyer and seller to agree to and sign a letter of intent (LOI) is a critical milestone in the M&A process. The LOI provides the basic guidelines for the deal moving forward: It outlines major issues like fundamental terms, price, agreement on major business points, and sets forth buyer exclusivity for a period […]

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Learn how to successfully plan and execute the integration of two companies. The closing of a deal is the fruition of months — even years — of hard work. With it, though, comes a whole new round of work that begins the moment the ink dries on the agreement. The integration of companies is a […]

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Failure to plan and execute integration properly can undo months or even years of hard work. More than 30% of companies fail to achieve their revenue goals after a deal closes. This is unfortunate, but also not too surprising. For some reason, perhaps because it comes at the end of the M&A process, leaders tend […]

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From the somewhat plausible to the downright outrageous, rumors abound whenever a transaction is announced. While some rumors may be innocuous, unfortunately others may have lasting, damaging effects on your company and employee morale so it’s important to quickly put a stop to them. Here are three practical steps to kill gossip and reduce confusion. […]

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Due diligence is more than just hammering away at a company to find out everything that might be wrong with it. It is about taking a focused approach throughout the acquisition process to uncover key points that will help you methodically evaluate a company to make sure it is the right fit. Traditionally, due diligence […]

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We generally recommend taking between 30 and 60 days to complete due diligence. We find this is enough time to complete a thorough evaluation of the business without letting the process drag on. Due diligence will include onsite visits with your internal team and your external team of lawyers, accountants, and your third party M&A […]

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Acquisitions can transform your company’s growth trajectory and set you up for long-term success. You may choose to use acquisition because your organic growth has stalled and hiring additional sales people or investing in R&D will not not help you achieve your business goals. Acquisition is fast and opens the door to many new growth options by bringing […]

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While it’s an important milestone, a signed letter of intent does not guarantee a successful acquisition. Just ask Pfizer who withdrew its $150 billion bid to acquire Allergan after signing a LOI. Pfizer ended up paying a breakup fee of $150 million. After the LOI is signed, you still have a few major steps to take before the acquisition […]

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One of the challenges of due diligence is that you often do not have access to all the data. Of course you want to know every last detail about the acquisition prospect so you can make the best decision. Unfortunately, the real world is never perfect. The prospect may have an incomplete or no record of the […]

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