Merger and acquisition overview

I’ve been involved in 45 company acquisitions, leading the IT due diligence in all of them. Prior to 1990, I had no idea what “due diligence” was, , , since then I have gained more experience in this area than possibly any IT manager or CIO.

Here is a merger and acquisition (M&A) overview that might be helpful to you one day:

An acquisition begins with a Letter of Intent from the acquiring company to the targeted company. When accepted, due diligence begins.

The model above shows each department in the company being involved in due diligence, , , orange box. To complete a successful merger of the two companies it is important for each department to conduct discovery in order to develop an appropriate transition plan.

It is vitally important the IT organization be involved in due diligence because many of the things that must take place immediately after the deal is completed will be dependent upon the IT support organization.

Once due diligence is completed, final negotiations take place and the companies agree to a merger.

When the deal is completed, assimilation activities begin, , , green box. The IT organization will be busy even if the company decides to leave the acquired company alone and to operate it as it has been operating. Even so, the parent company will want to merge Payroll, accounting and accounts payable into the parent company systems.

In addition, the company will want everyone to be on the same email systems and all company offices networked together for communication purposes, , , requires IT support to make it happen.

The assimilation box also shows every department being involved in assimilation activity.

Once the key transition projects are completed, the merger is done and we now operate as one company.

One response to “Merger and acquisition overview

  1. Interesting article regarding the IT assimilation challenges in Merger and Acquisition activity. Just read an excellent white paper on strategies for successful merger integration

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