The Complete Guide to Mergers and Acquisitions Process Tools to Support M&A Integration at Every Level, 3rd Edition

List of Exhibits xiii

Foreword, by Jim Jeffries, cofounder and chairman, M&A Leadership Council xvii

Preface xxiii

The Authors xxix

1) Integration: Where Deal Value Is Realized 1

• Buyer Beware! 2
• Factors Contributing to Poor M&A Results 4
• Deal Strategy—Then and Now 6
• Strategic Deal Rationale: The Eight Cs 8
• Serial Acquisitions as a Growth Strategy 9
• Integrations Exist on a Continuum 10
• Ten Key Recommendations for Maximizing Deal Value 15
• Develop a Sustained M&A Capability 18
• Be Sure to Avoid the Killer Phrases 19
• Chapter Summary 21
• Discussion Questions 23
• Rapid Assessment Tool 23

2) The Deal Flow Model: Pitfalls and Best Practices Throughout the M&A Process 25

• The Deal Flow Model 27
• Chapter Summary 53
• Discussion Questions 54
• Rapid Assessment Tool 54

3) Integration Begins with Due Diligence 57

• Due Diligence Should Prevent Surprises 58
• Due Diligence Is an Iterative Process 63
• Managing Due Diligence as a Rapid Results Project 65
• Target or Partner Firm Participation in Due Diligence 67
• Prioritize Synergies According toTheir Impacts on Deal Value 68
• Due Diligence and Integration Strategy 70
• Due Diligence and Integration Risk Factors 70
• Due Diligence and Organizational Culture 73
• Due Diligence and Human Resources 79
• Due Diligence and Human Capital 83
• Chapter Summary 84
• Discussion Questions 85
• Rapid Assessment Tool 86

4) Welcome to the Big Leagues of Change Management 89

• OrganizationalDynamics Created by Mergers and Acquisitions 90
• Seven Fundamentals of M&A Change Management 92
• Chapter Summary 107
• Discussion Questions 108
• Rapid Assessment Tool 109

5) The Merger Integration Work Streams Model 111

• The Merger IntegrationWork Streams Model 113
• Deploying the Model 124
• Chapter Summary 130
• Discussion Questions 130
• Rapid Assessment Tool 131

6) Organizing, Involving, and Coordinating Integration Task Forces 133

• Establishing the Integration Infrastructure 134
• Staffing the Integration Project Team 141
• Launching the Planning Process 142
• Chapter Summary 164
• Discussion Questions 165
• Rapid Assessment Tool 166

7) Waging the Communications Campaign 169

• Great Ideas and GameWinners 188
• M&A Communications: Lessons Learned 191
• Chapter Summary 192
• Discussion Questions 193
• Rapid Assessment Tool 194

8) Don’t Let Them Jump Ship: Retaining and Rerecruiting Your Key People 197

• “Me” Issues Dominate 198
• Examples of Effective Retention and Rerecruitment 199
• Identifying Key Talent 201
• UnderstandingWhat Motivates People 202
• Developing and Executing a Retention and Rerecruitment Action Plan 206
• Retention and Rerecruitment Options and Considerations 213
• Chapter Summary 215
• Discussion Questions 215
• Rapid Assessment Tool 216

9) Setting the Organization Cures Many Ills: Structure and Staffing Decisions 219

• Common Problems 221
• Ten Principles 225
• Fair Processes 240
• Staffing Process Models 242
• Chapter Summary 253
• Discussion Questions 254
• Rapid Assessment Tool 255

10) Tracking Success: Merger Measurement Systems 259

• Integration Measures 262
• Chapter Summary 290
• Discussion Questions 291
• Rapid Assessment Tool 292

11) “But They’re So Different”: Cultural Integration 295

• The Impact of Culture on NewCo Performance 296
• Operationalizing and Managing Cultural Integration 297
• Discovering, Designing, and Delivering Cultural Integration 300
• Answering Key Questions 304
• Sticking to the Cultural Integration Implementation Plan 307
• Continuously Manage NewCo Culture 308
• Chapter Summary 309
• Discussion Questions 310
• Rapid Assessment Tool 311

12) Human Capital Integration and the Human Resources Function 313

• The “Making StrategyWork” Model 316
• Case Studies in Human Capital–Related Integration 319
• Chapter Summary 327
• Discussion Questions 328
• Rapid Assessment Tool 329

13) Merger Repair 331

• Clear Symptoms 336
• Merger Repair Rapid Assessment 338
• Two Tracks of Merger Repair 339
• Chapter Summary 344
• Discussion Questions 345
• Rapid Assessment Tool 345

14) Taking Your M&A Game to the Next Level 347

• Are You Getting Better at M&A? 347
• Failing to Protect Your Investment 348
• Beware the “Not Invented Here” Syndrome 349
• Don’t Fumble at theGoal Line 350
• Enterprise-Level M&A Competency Model 351
• How Does Your Integration Stack Up? 356
• Does ItWork? 357
• Chapter Summary 360
• Discussion Questions 360
• Rapid Assessment Tool 361

Resource A: Sample Task Force Charter 365

Resource B: Integration Planning Template 373

Resource C: Executive Summary—The State of M&A Integration

Effectiveness Survey, 2014 393

References 417

Index 429

TIMOTHY GALPIN, PhD is a Clinical Professor of Management at Colorado State University teaching Strategy and Entrepreneurship. His consulting, research, and publishing are in the areas of Mergers and Acquisitions, Leading Sustainable Organizations, Leadership Effectiveness, and Entrepreneurship. Prior to his teaching, Tim gained over 20 years of experience as a management consultant and business manager working with boards and senior management around the world on strategic planning, strategy execution, merger and acquisition integration, divestitures, restructurings, human capital management, business productivity improvement, and organizational culture change. He still consults to firms on these topics.

MARK HERNDON serves as president of M&A Partners, where his practice includes M&A integration strategy and management; building internal M&A capabilities for corporate acquirers; due diligence; culture assessment and integration; and change management, communications, and leadership during periods of disruptive change. Previously, he was president of Parkwood Advisors and U.S. Region Leader for Merger and Acquisition Services with Watson Wyatt Worldwide. Mark also serves as chief knowledge officer for the M&A Leadership Council and as a board director for various private companies and faith-based and charitable organizations. He has presented keynote addresses and concurrent sessions to nearly 400,000 people and is the author of a popular weekly newsletter, Merger Monday Insights.