PWC has found that 60% of CEOs will accelerate M&A activities in 2023. Additionally, over 90% of M&A and private equity leaders achieved desired outcomes with transformation deals and post-merger integration (PMI) in 2022. Still, successful post-merger integration requires careful planning.
This post describes the importance of integration planning and provides recommendations for smooth integration. Keep reading to discover the PMI place in the M&A timeline and get a comprehensive post-merger integration checklist.
The deal closure is just the tip of the M&A iceberg. According to Ernst & Young, the post-merger integration process is the biggest challenge among all M&A activities.
Post-merger integration (PMI) is when two companies combine resources, technologies, people, and business functions to maximize the value of the merger.
In successful acquisitions, PMI activities center around a detailed integration checklist plan. A post-acquisition integration checklist is a multi-step guideline that outlines essential PMI activities in the M&A timeline to realize integration goals.
Boston Consulting Group emphasizes that companies still spread PMI activities across the day-to-day chores of their departments.
However, putting PMI in the background is the reason why 70-90% of deals fail during a post-merger integration phase.
Fortunately, the PMI perspective has changed in 2023.
PWC’s 2023 M&A integration survey shows that addressing integration aspects helps 45% of organizations achieve significant operational success. It’s a 236% increase compared to 2017-2019 measurements.
PWC also considers a well-defined post-merger integration plan the second most important contributor to successful PMI. It allows companies to conduct wise risk management, realize synergies, and generate higher value.
One should build post-merger integration planning around the main business aspects, including but not limited to:
According to McKinsey, 50% of successful acquirers achieve key synergy targets within the first year.
PWC’s research on 200+ M&A deals has found that successful dealmakers integrate first business functions three months post-deal and finish PMI within 1.5 years. Finances take the least time, while IT systems require the most effort.
Therefore, you should set PMI timelines within these timeframes and aim to complete PMI in 1.5 years post-deal at maximum. Let us get to the PMI phases in the M&A timeline.
| PMI phase | Position in the M&A timeline |
| Pre-planning | Final due diligence stage |
| PMI due diligence | After primary due diligence, when both parties finalize the deal closing decision |
| Day 1 readiness | The first day after deal closing |
| Day 100 | From day 100 post-deal and beyond |
PWC has found that a robust methodology, wise leadership, timely cultural integration, and seamless communication strategy help companies meet PMI deadlines.
Businesses must also build PMI processes around M&A due diligence team findings. As an acquiring company, you should prepare a due diligence request in advance. As a seller, you should consider these questions to ask when your company is being acquired.
| Check a comprehensive due diligence data room checklist to build a robust foundation for post-merger integration. |
Successful merger requires establishing dedicated PMI management teams in advance. They include a steering committee, an integration management office (IMO), and various teams supervising particular business processes.
Chief executive officer (CEO)
Develops a general post-merger integration plan
Chief financial officer (CFO)
Supervises the entire merger process
Chief operating officer (COO)
Approves PMI strategies and objectives
Chief HR officer (CHRO)
Prioritizes integration initiatives
M&A and PMI advisors
Conduct post-merger evaluation
Ensure project stakeholder alignment
Develops integration checklists
Supervises particular integration activities
Manages integration planning issues
Ensure cross-department collaboration
Develop integration strategies
Track PMI process improvement
Functional integration team leads
Report to the steering committee
Execute the post-acquisition integration project
Follow post-merger integration checklists
Engage in day-to-day integration activities
Bring the entire process into action
A post-acquisition integration plan checklist facilitates deals involving two or more companies and helps executives manage the first acquisitions. One can use the checklist as a reference to keep integration teams on track and increase accountability.
An acquiring company should develop the acquisition integration checklist at an early PMI planning stage and elaborate on it as the integration progresses.
Below, you can check the PMI checklist encompassing everything from preparations to PMI closing activities. As every M&A deal comes with unique challenges, you should customize the checklist based on your workflows.
Establish a steering committee and an IMO
Assemble functional PMI teams
Establish a post-merger integration framework
Define best practices, policies, and priorities in the PMI timeline
Develop the integration roadmap, including Day 1, Day 30, Day 60, and Day 100
Establish must-have and desirable integration goals
Define integration benefits and synergies
Allocate and review legal due diligence results (legal structure, litigations, contracts, regulatory requirements)
Define Day 1 must-have and desired activities
Develop a synergy tracking approach
Establish synergy evaluation criteria
Conduct PMI cost analysis
Prepare financial records
Consider financial synergies based on due diligence results
Allocate capital across responsible departments based on integration objectives
Conduct employee audits and gather employee lists for both companies
Review payroll structures for both companies
Consider employee benefits for both companies
Identify key talents to meet from the Day 1 phase
Review employee contracts
Consider employee relations with labor unions
Consider employee support and training initiatives
Consider corporate culture initiatives
Audit technology systems for both companies
Ensure the IT integration strategy reflects the company’s growth strategy and ensures competitive advantage
Identify technology redundancies and consolidation opportunities
Enable uninterrupted access to current technology systems
Evaluate data security risks and identify weak spots in existing systems and technologies
Develop communication frameworks and guidelines for employees, customers, key stakeholders, and partners.
Consider communication channels for integration management teams (virtual workspaces, virtual data rooms, emails, video conferencing apps, etc.)
Consider communication channels for shareholders, board directors, and partners.
Prepare welcoming materials for Day 1.
Consider press releases for customers, partners, and other external parties.
Ensure Preparation Phase activities are complete
Ensure Day 1 plan execution
Address past and emerging issues
Ensure regulatory compliance readiness
Access the financial systems of the acquired company
Ensure PMI budgeting is complete
Meet key employees to discuss PMI execution
Let employees sign required contracts
Introduce employee support and training initiatives
Access HR systems of the acquired organization
Introduce company culture improvement strategies
Ensure the staff has access to respective IT systems
Set up communication systems for employees, customers, external stakeholders, partners, and others
Initiate technology consolidation plans
Conduct planned meetings
Distribute planned materials among customers, employees, shareholders, partners, and others
Announce the merged entity’s CEO
Ensure 30-day goals and activities get completed
Review ongoing issues
Report 30-day milestones to board directors, shareholders, and investors
Assess integration benefits
Track and analyze synergies progress
Implement on-demand policies and new contracts
Ensure regulatory compliance
Ensure consistency in financial statements
Initiate integration processes around the financial system
Review integration budget spending
Analyze growth forecasts for the post-integration period
Establish a financial reporting system for the combined entity
Analyze employee metrics (turnover, job satisfaction, performance)
Develop and update onboarding documentation
Establish unified HR policies for the new entity
Identify and eliminate HR redundancies
Inspect how employee support and training initiatives perform
Audit existing technology projects
Consider how integrated solutions will perform
Implement necessary IT changes within the integration plan
Review security compliance and security performance
Conduct planned meetings and ensure lower management meetings occur as planned
Review marketing campaigns
Develop marketing strategies for the combined entity
Implement marketing (branding, customer experience) changes based on the integration plan
Ensure customer communications occur as planned
Review pricing models
Revise and combine customer lists of the target company
Revise and combine product lists of the target company
Develop sales forecasts for the post-integration period
Review operations and identify synergies and redundancies
Assess project management performance for both companies
Review inventory systems based on due diligence findings
Identify inventory and real estate consolidation opportunities
Conduct on-site checks
Review supplier contracts
Analyze supplier consolidation opportunities
Update vendor contracts
Complete 30-day and 60-day integration milestones
Track, analyze, and report synergies
Analyze and track integration benefits
Ensure regulatory compliance throughout PMI goals and achievements
Identify and address conflict of interest
Optimize the combined company’s organizational structure
Track and evaluate financial synergies
Consolidate financial records
Report financial metrics for the integration period
Address turnover issues
Evaluate and correct HR policies based on performance and integration goals
Evaluate and update employee support and training programs
Manage labor-related issues, such as employee satisfaction or union relations
Finish IT performance evaluations
Identify IT consolidation targets based on business functions
Merge IT infrastructure
Implement IT security policies across the combined company
Finish branding changes
Update marketing funnels and direct customers to new websites
Update customer touchpoints
Update pricing policies if needed
Establish and maintain communication with new clients
Determine a long-term customer relationship management system
Complete the post-merger integration plan
Analyze achieved synergies and ensure value creation
Finish legal optimization
Wrap up integration work streams upon PMI completion
Remove all redundancies
Fully implement a financial system for the combined company
Review financial metrics for the integration period
Fully implement HR systems and policies for the combined entity
Continue employee support and training programs
Implement career development initiatives, benefits, and bonuses
Transfer data and workflows to new systems
Finish infrastructure integrations
Approve and launch branding campaigns
Launch marketing strategies for the combined entity
Ensure smooth communication between marketing teams and supervise deadlines
Implement new business development models
Finish employee training regarding new products and services
Fortune 1,000 companies, mid-sized, and small businesses use virtual data rooms (VDRs) to facilitate post-merger integration. A virtual data room is a cloud workspace with dedicated M&A lifecycle management tools.
It drives M&A deals from preliminary acquisition research and cybersecurity M&A due diligence to post-merger integration and daily file sharing. A virtual data room combines the best PMI practices and ensures continuous improvement across the entire M&A timeline:
The virtual data room market enumerates over 100 solutions, and selecting the right one will help a company achieve the best results. To accelerate VDR selection, one can compare key players in the VDR market and use the knowledge and experience of data room reviews.
Companies should start planning post-merger integrations before M&A closing to harness acquisition benefits and survive in the long run.
For this, top executives should establish post-merger integration management bodies, like steering committees and PMI management offices.
They should develop comprehensive integration plans to accelerate PMI and address ongoing issues as early as possible. A post-merger integration finance checklist will be the easiest to implement, while IT integration takes the most time.
To kickstart PMI and achieve integration goals, successful companies use technology solutions, including virtual data rooms.
An M&A integration checklist covers essential tasks and requirements companies should follow to achieve seamless post-merger integration.
Post-deal activities should begin with a comprehensive post-acquisition integration plan checklist. One should develop it before the deal closes to ensure a fast and efficient PMI start.
To create a merger and acquisition integration checklist, one should establish the PMI leadership team and carefully plan the entire integration from start to finish.
Elisa is a marketing specialist with 15 years of experience. She worked for many VDR brands and gained insider knowledge of the industry.
At DataRooms.org, Elisa conducts marketing research, develops content plans, supervises content teams, and develops VDR review methodology. She envisions her mission as distributing accurate knowledge of virtual data rooms.
“My mission is to deliver accurate and relevant knowledge of virtual data rooms to as many people as possible.”
