M&A Transition: Secondary Steps - dummies

By Bill Snow

Upon closing an M&A transaction, you probably have some ideas, if not a plan, for making changes to the acquired company. But before you actually make those changes, you need to make sure the newly acquired employees are up to speed on the plan. You don’t need to (nor should you) dump everything on the employees at once.

Within 30 days of the M&A close

You don’t need to inundate employees on the day the deal is announced with every single change on the horizon; let them digest the announcement before you begin to make the following changes:

  • Operational update: You may want to change purchasing guidelines, vendors, suppliers, and the like, and instituting those changes within the first month makes the most sense.

  • Human resources: New employee handbooks, new-hire paperwork, 401k documents, insurance documents, and so on should be filled out and completed within the first month, if not the first days, following the close.

  • Hiring and firing: Probably the most difficult of all post-acquisition integration is reducing staff. If cuts in staff are necessary, make those cuts as soon as possible after the deal is announced. It’s a painful process, but the sooner it’s over, the sooner the business can move forward. You don’t want employees wondering (and gossiping) if they’re going to be fired or not.

Within 90 days of the M&A close

You can make some changes, such as the following, even later after the close:

  • Closing or moving operations: If you’ve made some decisions about combining or moving offices or shuttering operations, instituting those changes during the first few months of the acquisition probably makes the most sense.

    You don’t need to do this on the first day (remember, you want to give employees a little bit of time to digest the deal), but getting these sometimes difficult decisions over with sooner as opposed to later makes the most sense.

  • IT and software changes: IT and software changes are another area that you don’t need to deal with immediately. After you take care of other changes (such as payroll, HR, and purchasing), you can begin to update or change the IT and phone systems, if necessary.