Successfully Merging Two Companies Post Acquisition

Oct 30, 2018

IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities.  Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog article has been provided by Carolyne Simi of Your Project Planner (

Successfully Merging Two Companies Post Acquisition

Synergy, diversification, growth, pricing power, economies of scale, operational efficiency, market domination…these are just a few good reasons for companies to join ranks to become the powerhouse of their dreams. In today’s economy, it’s no longer realistic to sit still so merging is the name of the game. It’s an exciting step for any company to take but, when the honeymoon is over, the real work begins.

At the very least, there will be two operational units to bring together which is a daunting task. However, if it’s handled as a project with careful planning, clear communication, and staff engagement (from both sides) the results can be a winner all the way around.

When I say winner, I mean 1 + 1 = 3 meaning that the two entities have the opportunity to leverage their respective expertise and contribute to the creation of a bigger and better new entity that meets or exceeds Leadership’s vision. This assumes we’re not talking about a hostile takeover but, even so, I think there’s room for something more humane than the raiding and pillaging, ‘us versus them’ approach we’ve seen demonstrated in the past which leaves considerable collateral damage in its wake.

The key is to set the tone at the top – by the Leadership Team. A clear message of co-contribution, co-creation and cooperation that is carried out impeccably by the Integration Team will likely result in a very successful transition.

Here are 7 high-level steps the Integration Team can use

1. Stage the project: Having a clear understanding of why the merger happened in the first-place frames the outcome for the Integration Team. All tasks, decisions and actions need to be aligned to that result. Along with that, it’s critical to have a firm handle on the expectations of the prevailing Leadership. As the project goes along, it will likely become necessary to reset those expectations which will go far better if there’s a baseline at the outset.

2. Examine the landscape: Bringing two operational units together who are respectively entrenched in their own way of doing things can be a tricky task. However, it’s made easier if time is taken to understand the cultural characteristics, value differences, strengths and weaknesses on both sides. As an example, a company whose culture dictates a ‘quick to market’ approach will find it difficult to understand a more structured, measured methodology and vice versa. Leadership’s expectations will be an important barometer here but should be balanced with an examination of the strengths and weaknesses of both organizations. It may be that a ‘best of both’ approach is the way to go but it won’t be clear until all of the variables are examined. If the Leadership Team’s expectation is to adopt the ‘quick to market’ approach across the board, staff training will have to become part of the implementation plan.

3. Create the People Plan: Bottom line, the staff is the most critical element to accomplishing the integration of the two operational units. People work better and lend their cooperation faster when they feel valued and acknowledged so taking time to define the people plan is imperative. The best way is to interview everyone to get the measure of them: what do they do, how long have they been with the company, how do they feel about the company, how do they feel about the integration, what are their aspirations, what would they do if there was nothing stopping them, what’s their job history, etc.

If the companies maintain a performance evaluation system, it would be wise to read their last few appraisals and get their manager’s opinion as well. Determining the critical players is a must; then determine what will be done to include them in the process so they don’t jump ship.

The people plan must include regular communication with the entire staff to keep them apprised of the integration progress, field their questions, steady their nerves, quell rumors and stem the tide of resignations.

This exercise will also help source candidates who are willing to step up their game and put in the extra effort to participate on the Integration Team.

4. Special considerations: Confer with the Leadership Team to determine any special circumstances to be taken into consideration that may have an impact on operational procedures such as different fiscal year ends, and methodologies for recognizing revenue or valuing inventory. If so, interim procedures will have to be developed to get over the hurdle of converting from one procedure to another.

5. Map process flows: It’s important to map the process flows (if not already available) for both companies, including the systems that are used, and most especially how the systems communicate – what data is sent where, when, how, why and by whom. During the mapping process, it will be instrumental to identify the chronic problems that occur, why they happen, how frequently, and what ideas the staff has for resolving the problems. Once again, they’re a lynchpin to the success of the integration.

Another detail to look at in this step is to compare the features of the systems that do similar functions on either side of the fence as well as when the systems were purchased or licensed, the cost etc. All of these details will factor into the decision of which to keep.

One of the worst mistakes companies make is to think they can continue to use the old systems. Neglecting to integrate systems causes undo confusion and will damage the reputation of the new entity. Integration may have to be done in stages but establishing a plan to get it done it at the earliest possible time is paramount.

6. Propose the integration strategy: Once the process flows are understood and the prevailing systems have been identified, it’s time to develop the proposal for how it will all come together, including the rationale, benefits, challenges, risks and timeline. The integration strategy should also include the final staff configuration which has been worked out with Human Resources or the Leadership Team and any training plans deemed necessary.

Present the proposal in phases where the highest priority items are handled first. Be sure to include a change management process to track issues that come up during the integration and how they’ll be resolved.

By all means, couch the proposal in terms of how it will address the expectations of the Leadership Team that were defined in step 1.

7. Implement the integration strategy: Once sign-off has been received from the Leadership Team, the Integration Team can hold the kick off meeting to ensure that everyone is on the same page. Make sure the plan is broken down into understandable, manageable pieces and that everyone is clear about their role and responsibilities. Engage with the Leadership Team to take on the escalation of client related issues that may arise. Take checkpoints frequently and report status to the entire staff and Leadership Team.

Most importantly, celebrate.

Your Project Planner helps mid-range sized businesses plan & implement projects, create Standard Operating Procedures, streamline processes, improve team culture and achieve compliance so they can grow to the level they’ve envisioned.

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Carolyne Simi is the Founder & CEO of Your Project Planner.  Ms. Simi can be contacted for additional information about this article or the services offered by Your Project Planner at (206) 795-6059 or


IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.