Complete Guide to Mergers and Acquisitions

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, available at www.mapartners.net.

• List of Exhibits xiiiForeword, by Jim Jeffries, cofounder and chairman, M&A Leadership Council xviiPreface xxiiiThe Authors xxixOne Integration: Where Deal Value Is Realized 1Buyer Beware! 2Factors Contributing to Poor M&A Results 4Deal Strategy—Then and Now 6Strategic Deal Rationale: The Eight Cs 8Serial Acquisitions as a Growth Strategy 9Integrations Exist on a Continuum 10Ten Key Recommendations for Maximizing Deal Value 15Develop a Sustained M&A Capability 18Be Sure to Avoid the Killer Phrases 19Chapter Summary 21Discussion Questions 23Rapid Assessment Tool 23Two The Deal Flow Model: Pitfalls and Best Practices Throughout the M&A Process 25The Deal Flow Model 27Chapter Summary 53Discussion Questions 54Rapid Assessment Tool 54Three Integration Begins with Due Diligence 57Due Diligence Should Prevent Surprises 58Due Diligence Is an Iterative Process 63Managing Due Diligence as a Rapid Results Project 65Target or Partner Firm Participation in Due Diligence 67Prioritize Synergies According to Their Impacts on Deal Value 68Due Diligence and Integration Strategy 70Due Diligence and Integration Risk Factors 70Due Diligence and Organizational Culture 73Due Diligence and Human Resources 79Due Diligence and Human Capital 83Chapter Summary 84Discussion Questions 85Rapid Assessment Tool 86Four Welcome to the Big Leagues of Change Management 89Organizational Dynamics Created by Mergers and Acquisitions 90Seven Fundamentals of M&A Change Management 92Chapter Summary 107Discussion Questions 108Rapid Assessment Tool 109Five The Merger Integration Work Streams Model 111The Merger Integration Work Streams Model 113Deploying the Model 124Chapter Summary 130Discussion Questions 130Rapid Assessment Tool 131Six Organizing, Involving, and Coordinating Integration Task Forces 133Establishing the Integration Infrastructure 134Staffing the Integration Project Team 141Launching the Planning Process 142Chapter Summary 164Discussion Questions 165Rapid Assessment Tool 166Seven Waging the Communications Campaign 169Great Ideas and Game Winners 188M&A Communications: Lessons Learned 191Chapter Summary 192Discussion Questions 193Rapid Assessment Tool 194Eight Don’t Let Them Jump Ship: Retaining and Rerecruiting Your Key People 197“Me” Issues Dominate 198Examples of Effective Retention and Rerecruitment 199Identifying Key Talent 201Understanding What Motivates People 202Developing and Executing a Retention and Rerecruitment Action Plan 206Retention and Rerecruitment Options and Considerations 213Chapter Summary 215Discussion Questions 215Rapid Assessment Tool 216Nine Setting the Organization Cures Many Ills: Structure and Staffing Decisions 219Common Problems 221Ten Principles 225Fair Processes 240Staffing Process Models 242Chapter Summary 253Discussion Questions 254Rapid Assessment Tool 255Ten Tracking Success: Merger Measurement Systems 259Integration Measures 262Chapter Summary 290Discussion Questions 291Rapid Assessment Tool 292Eleven “But They’re So Different”: Cultural Integration 295The Impact of Culture on NewCo Performance 296Operationalizing and Managing Cultural Integration 297Discovering, Designing, and Delivering Cultural Integration 300Answering Key Questions 304Sticking to the Cultural Integration Implementation Plan 307Continuously Manage NewCo Culture 308Chapter Summary 309Discussion Questions 310Rapid Assessment Tool 311Twelve Human Capital Integration and the Human Resources Function 313The “Making Strategy Work” Model 316Case Studies in Human Capital–Related Integration 319Chapter Summary 327Discussion Questions 328Rapid Assessment Tool 329Thirteen Merger Repair 331Clear Symptoms 336Merger Repair Rapid Assessment 338Two Tracks of Merger Repair 339Chapter Summary 344Discussion Questions 345Rapid Assessment Tool 345Fourteen Taking Your M&A Game to the Next Level 347Are You Getting Better at M&A? 347Failing to Protect Your Investment 348Beware the “Not Invented Here” Syndrome 349Don’t Fumble at the Goal Line 350Enterprise-Level M&A Competency Model 351How Does Your Integration Stack Up? 356Does It Work? 357Chapter Summary 360Discussion Questions 360Rapid Assessment Tool 361Resource A: Sample Task Force Charter 365Resource B: Integration Planning Template 373Resource C: Executive Summary—The State of M&A Integration Effectiveness Survey, 2014 393References 417Index 429