M&A deals that fail are usually due to inadequate post-deal integration. DealRoom assists businesses to avoid common mistakes and maximize the value of their M&A transactions by assisting in the post-acquisition process.
The emphasis, sequence, and pace of integration post-deal must be specifically designed to reflect the goals and the sources of value that justified the purchase in the first place. It may sound obvious, but many companies rely on generic best practices and off-the shelf plans that concentrate too much on processes and don’t consider the unique aspects of their deal.
One company, for example acknowledged that R&D was the main source of value in their acquisition however, since the acquired company’s core product was still in development, they chose to not take advantage of the cost synergies and concentrate on growth by using the new company’s sales channels and capabilities in a more strategic manner. In the long term, they would reevaluate whether they should fully integrate R&D.
Another important practice in successful mergers of a larger scale is to transfer the responsibility for capturing cost and revenue synergies over to line managers in the newly acquired company. This ensures that line leaders receive the right rewards and responsibilities for directing tactical execution. It is also easier to monitor progress towards goals in real-time. We’ve found it beneficial to build the capacity for brief iterative meetings, with specific dates and goals, so that teams can adjust their goals and activities while moving through the PMI cycles.
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