- Help ease the transition for the acquired company.
- Keep in mind that many individuals who impact the success of the acquisition often don’t become involved with the transaction until day one.
- An effective 100-day plan aligns with the acquired company’s structure and considers the impact on each component of the organization.
Need help putting together a post-close plan?
Whether acquiring a stand-alone business, an add-on, or a carve-out, stakeholders should do all they can to help the acquired company successfully achieve the deal’s goals. We have talked about the key steps to include during due diligence, as well as close day best practices to consider. Now the transaction has closed and the confetti has cleared, it’s time to focus on the heavy lifting of achieving the deal thesis.
Communicate post-close expectations
Whether the sponsor/investor anticipates minimal changes in how the business operates, or radical changes in the vision and the direction of the company — what happens in the first 100 days is critical to establishing the structure and expectations of this new relationship.
Lack of proper post-merger integration planning often leads to failure to deliver expected results. Though in larger companies it is common to have teams focused on these tasks, resources in the lower middle market often do not have the bandwidth and/or the experience to execute swiftly and nimbly.
Most likely, the sponsor/investor shared the deal thesis with the management of the acquired company during the due diligence phase — and had direct conversations about their plans post-close. Now it is time to communicate that plan to those who will help drive those initiatives through the company.
It’s important to recognize that, many times, individuals who will play a key role in the success of the acquisition only get acquainted or truly engaged with the transaction on day one. This may be especially true in the lower middle market, where details may have been held close to the vest. It is essential that these individuals understand how the transaction impacts them, and what their roles are post-close. Many distractions may arise during this time, and leadership should work to keep everyone’s focus aligned with creating long-term value.
Use a road map
The 100-day plan should align with how the acquired company is structured, usually by department (finance, HR, sales, operations, etc.). Create an analysis and implementation plan for each department and clearly identify any changes that will support the creation of value. This plan can be as simple as stating “no changes,” or can include many pages of detail — but once a decision has been made, it should be shared to reduce distractions stemming from the unknown.
Each department’s plan should assess and note impact to:
- People and organizational structure
- Process integration
- Systems integration
- Product and customer realignment
- Synergy tracking
Define milestones and provide status reports at an appropriate cadence. All individuals should have a clear understanding of how to raise issues, and the authority to make decisions should be plainly allocated.
Critical success factors for the 100-day plan are:
- Transparent and focused communication
- Clear alignment to initial investment rationale
- Increased customer focus
- Early measures to retain key performers
- Decisive leadership changes
- Structured integration management that safeguards ongoing operations
While transactions vary greatly, this standard framework can be leveraged to help achieve the intended value.
How we can help
No M&A transaction is the same. At CLA, our team of private equity and venture capital professionals work alongside you to understand your specific business needs and goals. We’re here to help seamlessly guide you through every step of the transaction process.