POST MERGER INTEGRATION

Grow innovatively through strategic acquisitions and diversification.

There are good reasons for private equity or industrially oriented groups of companies to invest in new business areas, new technologies and new companies on the one hand, and to acquire and integrate entire companies on the other. Strategic and operational synergies become possible through the acquisition and integration. For medium-sized companies, the main focus is on knowledge transfer and securing skilled workers, as these factors are the innovation drivers of tomorrow. By strategically acquiring new business areas, companies can create competitive advantages over their rivals and gain early access to new growth technologies and markets. For private equity investors, on the other hand, the focus of the takeover is on the opportunities for growth as well as returns. 

The buy-and-build strategy is a growth strategy that is frequently used by investment companies of various types and medium-sized companies as well as corporates to differentiate their portfolios through further innovative solutions. An important factor for the success of the buy-and-build strategy is a long-term strategic orientation and a focus on synergies. Investors and companies must ensure that they select the right target companies and that the associated integration process is thoroughly planned and executed. In addition, it is also important to avoid certain pitfalls, such as overestimating synergy potential or underestimating implementation costs.

An important factor for the success of the buy-and-build strategy is a long-term strategic orientation and focus on synergies. Investors and companies must ensure that they select the right target companies and that the integration process is thoroughly planned and executed to ensure that the synergy potential is fully exploited. It is also important that investors and companies avoid certain pitfalls, such as overestimating synergy potential or underestimating implementation costs.

SUCCESS FACTORS OF AN INTEGRATION

Preparation

Successful integration of a company begins at the start of the M&A process. Through this early approach, value is not destroyed but preserved. Our approach includes the realization of synergies between the involved companies, which includes the evaluation of potentials for revenue and cost synergies, the support of "clean teams", negotiation support, pre-close planning and analysis, post-close integration support, the development of carve-out strategies and concepts as well as the preparation of implementation agreements.

Strategic alignment

It is understandable that private equity investors and strategic buyers want to realize their additional premium quickly, but too much speed can do more harm than good. It is important to jointly develop a balanced process of giving and taking speed in order to successfully master the integration. Particularly when bringing together different cultures and people, great sensitivity is required. Neglecting cultural due diligence and an integration plan can destroy mergers and acquisitions as well as shareholder value.

Risk Management

It is also important that investors and companies avoid certain risks, such as overestimating synergy potential or underestimating implementation costs.  Unfortunately, however, mergers and acquisitions usually destroy shareholder value, which can be due to various factors, such as a lack of clarity regarding the M&A strategy, inadequate preparation of one's own company for the transaction, purchase prices that are too high, underestimating the complexity and time required to realize synergies, and a lack of internal M&A competencies.

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HOW WE HELP YOU
IN YOUR INTEGRATION 

Startify's process experts help implement a buy-and-build strategy and integrate acquired companies in medium-sized business groups.  We provide support in identifying suitable target companies, evaluating synergy potentials and planning and accompanying the integration process. Our services also include support in overcoming challenges and conflict potentials during the integration process. In the PMI process, "Glue Guys" are needed to keep everyone on board and believing in the shared vision. Getting buy-in in the change process requires time, resources, and thorough preparation and tact in the doing.

The PMI team can also draw on its years of experience in organizational strategy and value activation. Our goal is to ensure that our clients have the best possible insight into the transaction and can plan accordingly to enable success and value creation. In doing so, we work internationally and collaborate with industry teams to ensure that our clients receive a seamless service throughout the transaction cycle. This applies to large transactions as well as mid-sized or smaller companies. A successful integration succeeds in realizing the desired value. Because the whole is greater than the sum of its parts!

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Christian Wewezow, Managing Partner