Fast benefits realization with Mergers & Acquisitions
Mergers & Acquisitions (M&A) is everyday business for one of kaastrup|andersen's customers, who regularly acquires small and medium-sized, well-functioning companies - but that does not mean that integrating a new company is a trivial or easy task.
One of kaastrup|andersen’s customers has a strategy of strengthening their business through acquisitions of small and medium-sized companies whose products fit into their existing product portfolio. One of the newly integrated companies is a small company with about 20 employees, specializing in developing administrative IT solutions for small businesses. The acquiring company is very experienced in the handling of Mergers & Acquisitions, integrating the acquired companies into the existing organization, so that both employees, IT systems and processes function as desired, and the transition takes place smoothly, quickly, and efficiently.
Read about how the small company became part of the acquiring company - we look at how the integration of the IT infrastructure was accomplished.
As usual when it comes to taking over other companies, the purchase was not announced until the agreement was formally signed – marking the kick-off of the start of the integration. The challenge was to ensure that the acquired company's employees, products, systems, and processes were integrated into the acquiring organization. In theory, such tasks seem relatively easy, but there are many details hidden when digging into the work. Solely the area of IT infrastructure contains a myriad of elements that need to be addressed and managed; from the purchase of equipment (PCs, mobile phones) to employees, creating the user accounts and profiles and migration of data – from various systems in the acquired company.
The acquiring organization has a lot of experience with carve-ins (Mergers & Acquisitions) and has established a clear and efficient process for how to handle the integration of the acquired company. The specific project was handled in 10 tracks: HR, service, purchasing, finance, marketing, legal, data analytics, development, facility, and IT. All the tracks were coordinate by an overall programme management and regular meetings were held to secure momentum, coherence, and synergy in the work.
In the IT track, the process started with an overview meeting with the acquired company's management group. The meeting initiated an overall information gathering, which provided input for an initial analysis as well as for a plan for further work. At the same time the project started a series of quite tangible tasks, such as the purchase of PCs and creating user accounts. This enabled the new employees to log into the acquirer's internal systems such as intranet portal, e-mail, Yammer, MS Teams. In short: fast and efficient creation of a 'normal working day' for the new employees, to facilitate their inclusion in the organization's culture and values.
Subsequently the project conducted a detailed analysis using the many clarifications, information and data continuously accrued from the different functional areas in the acquired company. One of the goals of the detailed analysis was to uncover which of the acquiring company's standard IT services were to be used - and which special services in the acquired company were to be considered. The detailed analysis was thus the focal point of the activities in the integration, as it ensured that all elements were thoroughly investigated and taken into account - and that there was a clear plan for handling the individual elements. At the same time, the detailed analysis formed the basis for a comprehensive, final and detailed plan, which set out frameworks and timelines for the actual integration of the acquired company.
The final detailed plan set the framework for the practical work in the project (for example the migration of mail and data, moving the servers etc). The last phase consisted of handover to Operation and Support in the acquiring company's IT organization.
The acquired company is now part of the acquiring company's organization, so that employees, processes, and systems work together and create value. The new products are integrated into the overall market strategy, customer contracts are in place and the project has defined and established a reporting setup ensuring that the overall finance and controller functions receive data from those of the acquired company's systems that have not been replaced with systems in the acquiring company. A plan has also been made for when the rest of the acquired company's systems will be migrated to the remaining core systems of the acquiring company.
The practical side of integration takes up a lot of time and effort, but at the same time it is important not to underestimate the challenge that lies in integrating a small, well-functioning company into a large company, into another organization, culture, other processes, and systems. It takes patience, openness, and work from both the acquiring and the acquired company to ensure that both the process and the result make sense and create value. The project has succeeded with both the practical and the organizational challenges and the expected benefits from the acquisition can be realized.
The acquiring company's structured approach to Mergers & Acquisitions has been fundamental to the smooth and efficient process. From the project’s kick-off to the complete integration and hand-over to Operation and Support, only three months went by.
kaastrup|andersen handled the project management of the integration of the IT track.
Do you also face challenges related to carve-in or carve-out? It can present great challenges, both organizationally, process-wise and IT-wise…
kaastrup|andersen has helped many companies to ensure that the benefits from both the purchase and sale of parts of the company are realized as expected. The case above is about carve-in (Mergers & Acquisitions). You can also read about a couple of our carve-out projects: Successful carve-out and -in via close cooperation and N1 and Eniig.
Do you also want our help? Contact us and have a non-committal talk about how we together strengthen and lift your company. You are always welcome to contact Lars Glowienka at email@example.com