17th February 2021
Onboarding a new business along with its internal processes and procedures, staff members, clients, equipment, and everything else that can come with it requires careful and deliberate planning. It also lends itself to answering some basic questions – why is integration important, who should be involved, what’s the timeline, and what needs to be considered? MSI's Western Australia accounting member McKinley Plowman explains more.
In this scenario, the “why” is fairly obvious – the goal is to improve the chances of an acquisition’s overall success. More specifically though, thinking through and planning out the integration of a new business should create a win/win scenario for all parties. The practical outcome you’re aiming to see is a positive, welcoming new setting for incoming staff; reassurance and stability for clients; minimal downtime for both businesses; and a financially viable acquisition.
Getting ahead of the game, carefully stepping out the necessary components in the new business integration and including all relevant stakeholders gives the whole operation the best chances of succeeding, not only in the financial sense but also from a cultural and operational perspective.
Who: As we just touched on, it is crucial to include all relevant stakeholders when integrating an acquired business. Key decision-makers from both sides must play a role in the integration process, taking into account the various aspects of each business – which we’ll cover off in the next section the “What”. As far as personnel are concerned, staff members from both the acquiring party and the business being acquired can sometimes be left out of the loop. While not everything within an acquisition scenario should be broadcast to the whole team, some concerns can emerge, for example possible redundancies, the addition of a new group of team members, the potential imposition of new and different processes and procedures, amongst many others. Keeping an open, honest and appropriate line of communication between management and the rest of the team is crucial, particularly when considering workplace harmony.
When: The timeline for an acquisition can bend and stretch as a result of many factors, however as a rule of thumb, the period for integration starts from around 60 days before settlement, until at least 100 days after settlement. Basically, integrating a new set of staff, procedures, clients and everything else that comes with an acquisition cannot be rushed, and a specific timeline can assist in ensuring everything runs as smoothly as possible.
Each acquisition is different, and each has a different level of complexity and things to consider; and to reiterate these are things that should be taken into account well in advance of settlement as part of the broader Due Diligence (DD) process and maintained after settlement. Broadly speaking, there are six major areas that should be addressed, and below you’ll find a brief breakdown of each.
Note that the above list is by no means extensive – however it should give you a good idea regarding how vast and specific the different factors are within an acquisition scenario. There are often parts which will be overlooked, so giving yourself and your colleagues enough time to get the job done right is crucial.
The bottom line is, many acquisitions do fail – your job is to make sure that yours is the exception. Maintain communication, plan ahead, don’t rush the process, and involve the right people at the right time. For an analogy – think of an acquisition like introducing a new pet into the family. It takes time, preparation, concerted effort, knowledge, care and a welcoming environment.
McKinley Plowman is one of WA’s largest and most successful privately owned, independent accounting firms. We have a dedicated team of accountants, wealth experts, superannuation and audit advisors, property specialists, pension transfer consultants, finance brokers, entrepreneurs, and most recently, our own internal advertising and branding agency.
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