Mergers & Acquisitons - a way to get it right!

Mergers and acquisitions (M&A) can be an effective strategy for growing the top-line and bottom-line for organizations. Companies consolidate to increase market share, remove duplicate capacities, acquire services/specialties/technology more quickly than it could be organically built, develop new businesses / enhance delivery models, and improve the company performance. Most often, companies merge or acquire to grow, intending to provide new top-line revenue or bottom-line profitability. Working closely with M&A teams, we position the critical aspects of people, process, technology, and culture in the M&A lifecycle.

The art of successful M&A often requires complete integration. Without integrating the companies fully (culture, people, processes, and underpinning technologies), the potential exists for the separate entities to lose out on valuable connections and synergies. It becomes infinitely harder to establish an organizational culture to discover, stimulate, and institutionalize innovation. New enterprises are increasingly likely to succeed when they optimize the resources of converging companies.

Mergers & Acquisitions require a focus and discipline to be productive and successful:

• Day Zero: Preparations through Integration Planning - before closing the deal, are just the beginning of a successful M&A transaction.
• Day One: Post-Merger Integration (PMI) / Transformation (Execution) — fulfilling strategic expectations of the deal, is the successive follow-through needed to execute the PMI.

The M&A practice helps clients through critical steps - bringing a transaction from concept through execution. We work closely with M&A teams to position the essential aspects of people, process, technology, and culture in the M&A lifecycle - helping develop the structure & discipline to identify, execute, and integrate their deals effectively.

To integrate more fully or entirely requires:

• Identifying processes offering the best value and adopting them
• Considering systems needing consolidation and centralization (e.g., performing Application/Technology Rationalization; ApRat) of all systems including financial, operations & IT) vs. having autonomy (e.g., different core systems except for some specialty-specific technologies)
• Providing training to employees on new processes and technologies resulting from the integration
• Viewing the integration and road mapping the transition into its three primary aspects: 

1. Running the two companies separately (side-by-side),
2. Combining into a single company in which cultures unify, and
3. Creating a new identity that works together for a new future.

DGCpartners’ M&A Services helps clients achieve the strategic, tactical, and financial goals of the integration.

• Focused – We are focused solely on healthcare and health-related industries - our advisors have the critical industry knowledge and, subsequently, provide clients with sound advice.
• Unbiased - Our firm is independent in that we are not affiliated with any technology, reinsurance brokerage company, or public equity research organizations - enabling us to provide objective analyses and advice.
• Value-Adding - We have a unique blend of advisors with government, manufacturing, healthcare, insurance, and other process-industries-related experience - allowing us to look at the big picture while still paying attention to detail – treating every engagement with equal importance and like it was our own

Post-Merger Integration holds the Key to a Successful M&A

Without a robust cultural and technology integration plan, M&As risk failing to deliver long-term value. Create value by effectively merging cultures and leveraging technologies! Our focus is on helping your business grow through foresight, planning, risk mitigation, leadership, and an understanding of the challenges to success. Our process leverages industry-leading best practices around process execution, budgeting, operational efficiencies, and improving business-IT decision-making.  The approach is like most IT assessments & audits; however, the difference is that it doesn’t just lead to a strategic plan. It directly supports the continued operation of the acquired company and the associated transition projects required to integrate IT staff, processes & technologies.

The fundamental principle behind any merger is the companies will be more valuable together than as separate entities.

Technology & IT are increasingly critical success factors in enabling post-deal business-IT integrations (PMI – Post-Merger Integration), new development initiatives, and successful integration and divestiture programs. We have a range of pre- and post-transaction services, tailored to meet the client’s unique circumstances, to help ensure that IT is a successful enabler for the M&A lifecycle, including:

• Core IT Diligence: Assessing the reliability, scope, and opportunities arising from IT applications, processes, infrastructure, and teams, and how well they meet current and future business needs (including strategies to align the business & IT, reduce IT expense costs, improve scalability, manage risk, clarify budgets, and ascertain future scenario planning & innovations.)
• IT Synergies: Assisting clients in assessing and quantifying IT synergies to develop robust synergy cases that can stand up to private and public reporting, if required
• Application / IT Rationalization: Performing application & IT inventories and rationalization, reviewing the capabilities of IT solutions (e.g., SW & HW) versus claimed benefits, competitors’ offerings, and market differentiating capabilities
• Capabilities Assessment: Reviewing business-IT relationships, customer service, and IT/MSP service agreements design, costing, dependency, and risks.
• Integration Plan and Separation Support Planning: Helping clients realize the intended benefits, identifying / mitigating risks, barriers, and enablers – including dependency on IT and alternatives.
• Integration Management Office: Enabling clients to plan, establish, and drive a post-merger Integration Management Office (IMO) through the assimilation of acquired businesses, focusing on securing value and managing risk/costs for a prescribed period (typically through 1st quarter post-completion)

The following table includes many of the Information Technology Due Diligence (ITDD) components (not all) that should be completed and understood before executing the deal.

Identifying the need and mitigating risk

Due to the financial focus and the confidential nature of M&A transactions, Information Technology is often not considered until late in the process. Unfortunately, excluding or glossing over the technology aspects presents high risk and usually adversely affects the anticipated post-merger financial results as IT costs and timescales are not understood and underestimated. The faster you can execute the ITDD, the technology assessment, and the resulting Integration Plan, the faster the company will realize business value from the deal.

Comprehensive, Standards-based Approach to ITDD

A comprehensive ITDD assessment provides an objective evaluation and review of the governance, data, cloud, application architecture, ITOps (network & infrastructure), security/cybersecurity, IT Management/people, IT service management, system development/DevOps, PPMO/PMO, Continuity/Resilience, and Innovation processes.

The following is a representative composite of the M&A IT Due Diligence (ITDD) Acquisition Target Documentation Request List and Matrix.

Also, see:

1. M&A post-mortem insights
2. M&A a few basics
3. M&A doesn't have to be so difficult

The Benefits of Using DGCpartners

• Leverage our proven IT due diligence approaches, processes, and checklists that guide diligence efforts and summarize critical findings for client leadership and key stakeholders
• Evaluate and summarize relevant assessment findings, including operational risks, financial and operational implications, and mitigation and migration strategies
• Gain access to in-depth functional knowledge and experience needed for detailed analysis and supplement core diligence teams
• Leverage the integration strategy to align value drivers and understand a complete view of cost and resource implications
• Accelerate the assimilation of IT and Business resources and process across the newly established enterprise

ABOUT

DGCpartners is a small, innovative, veteran-owned, and independent management consulting firm helping clients gain control of costs and schedule for their most strategic initiatives. DGC has deep experience in Assessments, Resilience, and Performance Improvement programs and applies an embedded model to share expertise in support of customers having missions requiring robust capabilities. Our processes provide a comprehensive suite of evaluation, optimization, testing, and exercise services focused on enhancing program effectiveness and best practices.

Don Gleason has over 20 years of quality, program management, and performance excellence experience, including many years as a CIO. He provides C-Level advice, serving as PPM/PMO, ITIL, and Lean consultant, and as a practice leader for DGCpartners, UHG-Optum, IBM, Keane, General Dynamics-BIW, and BRP Consulting. Don has managed multiple large high-value initiatives (government and commercial), programs and projects, and teams simultaneously, while continuously fostering creativity and innovation (across various industries.) - with a strong history and proven track record of turning around sub-optimal situations and equipping organizations with a competitive advantage through business process and technology innovation.

If you need help determining where to start, we will help you triage your situation, and together we can craft a management plan and make things happen. 

Give us a call today: 207.200.7650 so we can start the journey to sustaining successes.

To get you started on the right path that uses your team to assure a sustainable transformation & change management - Reach out to me here on LinkedIn, Twitter, or through DGCpartners

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