Mergers and Acquisitions: An Overview of the Five Key Integration Areas

 

Mergers and Acquisitions (M&A) offer the chance for companies to grow, transform, and seize available opportunities. As explained by Investopedia, M&A is a general term used to describe the consolidation of companies or corporate assets. As effective as M&A transactions can be, they also have the potential to go wrong without proper diligence and planning.

One of the most important phases of a merger or an acquisition is integration. Post-Merger Integration (PMI) is a complicated process where a company’s operations are combined, rearranged, or restructured to take advantage of synergies. Here, our Chicago M&A lawyers highlight the five (5) key areas of integration following a merger or acquisition.

Finances

When commercial entities merge, integration of finances is a crucial and time-sensitive matter. Different companies/organizations may have some variations in their financial standards and procedures. It is imperative finances are integrated as soon after an M&A deal as possible. Without financial integration, many of the potential gains from a merger or acquisition will be left on the table.

Information Technology (IT)

In the modern business world, virtually every organization relies on Information Technology (IT). Integrating IT practices has become one of the most important parts of the M&A process. Parties should consider and evaluate IT governance process, IT organization and structure, and data security. There are almost always opportunities for greater efficiency through effective integration of information technology.

Supply Chain Management and Procurement

Supplies chains, procurement, and vendor contracts all represent another important area of post-merger integration. Companies should carefully review their practices to ensure maximum efficiency. There may be opportunities for both short-term savings, long-term savings, and overall improved effectiveness.

Marketing and Sales

After a merger or acquisition, it is important to make sure the entire business structure is on the same page regarding marketing, sales, and client acquisition. If marketing and/or sales is a key component of the business, there needs to be a proactive effort to ensure an integration between the marketing and sales team.

Compliance and Risk Management

Finally, legal compliance and risk management are always an issue in M&A transactions. In too many cases, good deals go bad because parties fail to rigorously evaluate and address certain financial risks. All parties need to understand the underlying risk of any transaction. Comprehensive post-merger integration can help alleviate some of these risks. Compliance and risk management must be considered.

Contact Our Chicago, IL Mergers & Acquisitions Attorneys for Immediate Help

At North Suburban Legal Services LLC, our Illinois M&A attorneys have the skills, expertise, and diligence to help clients navigate the legal process. If you have questions about M&A integration, we are available to help. For a no cost, strictly private consultation with an experienced corporate lawyer, please contact our law firm right away. We represent clients throughout the entire region, including in Chicago, Schaumburg, Evanston, Tinley Park, Bolingbrook, Aurora, Naperville, and St. Charles.

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