Strategic growth and the impact of an effective integration infrastructure

A white paper from Wharton PE/VC Partner, McGladrey

A successful merger integration begins before the deal is signed, during the due diligence phase. When investing in a company that will serve as a platform for add-on acquisitions, private equity firms must assess the current management team's capabilities as well as existing systems and processes to handle mergers and growth. Any planned changes in management should also be objectively evaluated in terms of incoming leaders' merger integration capabilities. If the assessment determines that outside resources are necessary to execute merger integration efficiently, it's best to engage them early in the process to save time and money, as well as avert potential disasters.

There are multiple consequences to unsuccessful merger integration — synergies take longer to accomplish or are never accomplished at all; unexpected costs arise. The biggest risk, however, is that the management team will be so distracted trying to manage the process that critical items get overlooked, the day-to-day business suffers and customers leave.


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