If you are thinking of pursuing an acquisition should you integrate the acquired company?
Whether you integrate a company following an acquisition depends on how the deal connects with your broader corporate strategy. Companies should explore a broad spectrum of potential integration/non-integration options to identify the best archetype that aligns with the deal thesis.
Depending on the degree of change required for the acquired company and the acquirer there are four integration archetypes.
Archetype 1: The Target is run as an autonomous subsidiary that consolidates only financial reporting with the Parent
Archetype 2: The Target’s operations are wholly absorbed into the Parent and adopts the Parent’s operating model
Archetype 3: Parent selectively integrates elements of the Target (eg: back office)
Archetype 4: Major parts of the operating model of both companies are changed, with structural changes across all areas of the business
Archetypes 2-4 typically require some degree of integration and change. Depending on the level of integration required, companies will need to plan for the post-acquisition integration phase.
Are you in the process of acquiring a company? Planning for post-acquisition integration at an early stage helps ensure a smoother transition and maximizes the value and success of the acquisition.
Reach out if you'd like to discuss your M and A integration needs and see how we can help you!
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