Mergers & Acquisitions: Realizing Their Value

Globally, close to $2.0 Trillion is spent on mergers and acquisitions every year. Yet article after article and numerous research studies state that the failure rate (as defined by a transaction that fails to realize the stated qualitative and quantitative benefits outlined in the deal thesis) of Mergers and Acquisitions is somewhere between 50-80%.


Failures have been attributed to many causes, such as poor strategic rationale, cultural mismatch, poor communication, and unrealistic financial targets due to overpayment. However, one reason is cited more often than all others: Poor planning for integration.


Many companies treat integration as a post-acquisition activity. Once the deal is inked, it’s time to figure out how to digest it and drive out the value promised to investors. Best practice, however, is to begin to focus on integration planning during the definition of the deal thesis. The integration approach should be almost entirely informed by the type of acquisition. Mergers or acquisitions generally focus on 4 targets of value creation: increasing the customer base, improving revenue and cost drivers, optimizing resources (employees, technology, products, etc.), and optimizing processes (operations, sales, R&D, etc.). Failure to understand what was bought and why contributes largely to unrealized value creation. This is where an Integration Management Office (IMO) is a critical need in a complicated process.


An IMO's role is to put in place the people, process, and overall governance to match the fact pattern of the deal toward the goal of capturing value. The IMO is NOT a PMO repurposed for an integration "project", as many organizations incorrectly assume. The IMO has a broader charter and assumes far greater responsibility, complexity, and scale. Staffing an IMO is also different.


For some companies whose strategy is growth through acquisition, an IMO will be staffed with leaders considered to be "High Performers" and use the IMO as a testing ground before advancement into senior ranks An IMO is charged with managing not only the complexity of integration tasks, but also significant interdependencies, regular communications with myriad stakeholder, internally and externally, and manage the uncertainty that goes with a merger or acquisition.

Midtown Consulting Group (MCG) can help you and your company assess if you’re set up for M&A success. Leveraging our years of expertise, MCG will guide you through a disciplined integration framework – one that is coordinated in its approach, yet flexible enough to adapt to each transition’s unique circumstances and evolving needs.

Midtown Consulting Group (MCG) is a management and technology consulting for specific industries, including Financial Services, Healthcare, Education and Hospitality. We believe that combining true industry expertise with accelerators deliver solutions that are meaningful for our clients. We accelerate results by leveraging proven software, methodologies, templates and frameworks to deliver data and analytics, Merger and Acquisition and merchant onboarding capabilities.

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