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Our company’s approach has always been to take a “light integration approach” where you assume risks to close the deal faster and to basically allow them to continue doing what they were. In my opinion, this was hard for me to accept given so much can be missed, putting your company at risk and wasting time and resources. We are now evaluating these new companies and may be selling or downsizing them because they haven’t been as profitable (for a variety of reasons). What advice do you have to convince leadership to be more thorough, to fully complete the due diligence phases and to recognize synergies early on? We aren’t a big company with a lot of resources.
Hello Sarah, this all depends on your M&A strategy, is Leadership happy with the sale or re-structuring of the new companies? Are the returns acceptable? Am I right to assume that the light integration approach is based initially on Financial DD? It can be seen that to have a higher chance of a successful Merger or Acquisition the initial assessment should not only be based on financial assessments but also the strategic and sociocultural fits.
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