You need a senior manager to take charge of the entire acquisition process
You would not contemplate building a new factory or moving your Head Office without assigning primary project management activity to a senior member of management. Thus you would be surprised how often a major acquisition is undertaken without a similar role being created to manage the pre and post activities of an acquisition. For many businesses, an acquisition is the largest and most disruptive project they will probably undertake and yet many fail to adequately devote resources to managing the activity. It is no wonder that the majority fail to deliver in a positive outcome.
In the lead up to the acquisition agreement, the acquirer will undertake a detailed review of the target business including numerous interviews by senior management of their counterparts in the target firm. This activity would be complemented by a financial and legal due diligence inspection by external service providers and a funding discussion with bankers and investors. Existing shareholders and key managers and employees of the buying firm will need to be briefed and a post acquisition plan assembled. While all this is going on and senior management are being pulled away from their every day responsibilities, the current business has to continue.
Plan for a lot of disruption to existing operations
However, the pre acquisition activity is likely to be the easy part. Just consider how much work is to be done once the ink is dry. The chances are that some of the acquired senior management will leave prior to or on the date of sale. There may well be key employees who are concerned about their new roles and need to be directly dealt with. At the same time, customers and suppliers of the acquired business will be concerned about on-going support and some effort will need to be spent to assure them of continuing operations. The loss of management in the acquired business also results in some loss of corporate knowledge and disruptions and delays are likely to result.
If the acquired business is to continue in full or part as a stand-alone business, the new owner will need to move quickly to establish effective management over the activity. This may mean implementing new reporting systems, setting up an advisory or director board and, perhaps, installing new senior management. All this will need to be done quickly while providing assurances to acquired staff of business continuity.
If some level of merger activity is to take place, there will need to be consideration of new roles and responsibilities, the possibility of some redundancies and perhaps even relocating to new premises to handle a larger number of staff or functions. Systems and processes will need to be integrated, cultural differences dealt with and existing business levels protected.
Few managers have extensive M&A experience
Can all this be done by existing management while continuing to cover their primary responsibilities? Almost certainly not. Few managers have an intimate knowledge of M&A processes and few have the capacity to take off extended periods of time away from their primary roles. The only way to tackle this type of activity is to bring into the firm someone with M&A expertise, perhaps also someone with change management expertise. While much of the decision making cannot be outsourced or delegated, the day to day management of the acquisition activity can be. Whether this is a full time role or a part time one, there is a strong case for putting someone in charge of the entire process.
