Acquisition Alignment and Integration

Acquisitions and mergers provide a tremendous opportunity to create value when driven by strategy and informed due diligence. This process is typically a combination of financial, legal, managerial, and organizational assessment. When all four perspectives point to a positive fit, the deal is worth pursuing.

80% of acquisitions are said to fail meeting projected expectations, and 95% of those are the result of poor cultural integration and planning. In other words, many due diligence efforts underestimate or under analyze the managerial and organizational portions of the due diligence process. Our managerial and organizational due diligence process measures management expertise and awareness, as well as culture fit between the organizations.

Towers and Perrin report in a 2004 study that human resource analysis can have a major impact on choosing to merge or acquire the right company. In their study they quote, “50% of mergers or acquisitions (i.e., deals) failed, according to shareholders, because HR was not sufficiently involved in the process. A major part of what you are buying is the talent and intellectual capital of the organization.”

Our methodology helps us to determine the potential for successful integration, and we identify those talent integration points where difficulties could arise. Recommendations that we provide clients conducting a due diligence process are based in fact and provide meaningful insights, not simply ‘hope’ that different management teams leading different cultures will simply ‘get along’.