M&A Transition: How to Determine the Level of Autonomy

One of the most basic questions you face as a Buyer after the M&A deal closes is, “What the heck should I do with what I just bought?” On paper, combining two entities may seem easy, but in reality, that integration is much more complex. Further, the level of integration varies greatly from Buyer to Buyer.

  • Financial Buyers, such as private equity (PE) firms, usually allow the acquisition to maintain a level of autonomy, especially if they’re not integrating the acquired company into another firm but rather running it as a standalone business.

    These Buyers are in the business of buying and selling businesses and therefore aren’t in the same industry as their acquisition; although they may make some operational changes, financial Buyers typically let the acquired company run itself.

  • Strategic Buyers often institute quite a bit of operational integration and may combine some products and eliminate others. Strategic Buyers are often in the same (or a related) industry as their acquisition, thus the level of integration may be very high.

No matter what type of Buyer you are, after the deal closes, you should do nothing! Let the acquired company operate as before. Take some time to understand the business and how it operates before instituting changes. Instituting huge changes before you fully understand the business can be a recipe for huge problems.

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