Simultanous Signing & Closing
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Hi all,
when you have a simultanous signing and closing, when do you start the integration planning? Directly after the closing or high-level start before signing? I have concerns, as we have only limited access to data of the target before signing.
Hi,
I deals I have been involved where signing and closing are on the same day, integration process started before signing (i.e. during negotiation).
Better said, pre-integration and integration have started before signing so that all parties involved are aware of the plan and full integration can commence right away after signing.
Please note that in all deals there was an earn-out component ensuring the Sellers commitment.Best,
MarkoHi!
You can start high-level integration planning before the signing to ensure you are prepared as much as possible after the closing. The planning should be flexible and based on broad assumptions as you indeed can not do final decisions without knowing all data in advance. While you do not have full data, you still can collect some useful information during the DD process and use it for planning.
I would begin integration planning pre-close, identifying any high risk areas and a strong communications plan to begin day one. You will want to be prepared so the buying company looks organized and capable of running both businesses. Employees will appreciate a well thought out but adaptable plan.
Hi Lena
I agree with Bethany. Integration pre-planning should start pre-close even though the access to data is limited. Not being proactive, puts you in a significant disadvantage on Day 1. Bethany also made a great point by saying:” Employees will appreciate a well thought out but adaptable plan.”
EdwardSame here. I think one should start pre-close by accounting for all the available information. It’s important to acknowledge that as more information is gathered, the strategy can shift.
We’ve done several simultaneous sign/close and had to begin planning prior to deal close. Especially from the IT perspective, we had to do this in order to ensure appropriate access was ready day 1, that financial systems were set up to take responsibility for reporting day 1, etc.
I have had similar experiences; however, it was always critical to begin integration planning early in order to ensure the plan is actionable on close.
Fully agree that PMI planning needs to start several weeks ahead of Close (at a minimum). Without taking the weeks needed to establish an IMO, align with the SteerCo, and have full buy-in to a comprehensive PMI plan, the chance for a successful integration is minimal.
Thank you very much for your perspectives. We have already started the integration planning by setting up the integration governance and clarified Day 1 requirements.
Mallory, it sounds like your acquisition pre-planning results in the added benefit of quicker identity integration as well. Beyond the functional benefit of having new IT access set up on Day 1, it also sets a cultural precedent for preparedness and makes clear that the NewCo’s combined existence is a high priority for leadership.
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