What if your biggest headaches came after the mergers and acquisitions (M&A) deal went through?
When you’re in the midst of M&A, it’s tempting to simply focus on getting through everything. However, the truth is that you have plenty of things you still need to worry about once the ink dries.
What are these things, though? What can your own business do to be prepared? Keep reading to discover the things you need to look for after the M&A deal is closed!
1. Employee Discussions: Who’s Staying After the M&A
After the deal is closed, chances are you are counting on certain employees to stay on board. That means you need to have some frank conversations with your employees about the future of their careers.
On the surface level, that means making sure each employee understands what their job responsibilities are and whether they genuinely plan to stay with the company. You should also dig a little deeper to discover how your best employees feel about the company changes and the current state of the company.
Remember: All it takes is a few conversations after the deal is closed to help secure your best employees during this very delicate time. As always, communication is key.
2. Administrative Hurdles to be Cleared with an M&A
After an M&A deal closes, much of what you need to focus on is boring administrative stuff. This mostly includes clearing some technological and administrative hurdles that might otherwise affect your company.
For example, you’ll need to finalize any changes to payroll. You’ll need to incorporate any necessary changes to the benefits plan. In some cases, you may also need to move your company to an entirely different technology (such as a new CMR).
On their own, each of these challenges is pretty basic, and your due diligence should take care of most of this ahead of time. It’s only by clearing these hurdles that you can set your own company up for success.
3. M&A May Bring on Technological Difficulties
In some cases, shifting to a different technology can be quite difficult. This is likely to happen when both companies were relying on very different IT systems.
The easiest solution is to pick one IT system for both companies. Even then, you must make sure your accounting systems properly integrate, that all database info properly merges, and so on.
These technological difficulties may prove to be your greatest headache. Without getting the technology issues resolved, everything may grind to a halt after the deal is closed.
4. Time for Troubleshooting Before and After an M&A
Nobody likes to embrace negative thinking. After an M&A deal closes, it is vitally important that you allow time for the inevitable troubleshooting.
In other words, it’s not a matter of if things are going to go wrong but when. Eventually, there are going to be IT problems, payroll problems, employee problems, and more.
You’ll need to solve each of these problems as they occur, and no one problem will be exactly like other problems. When you brace yourself to troubleshoot these problems, they will be far less likely to disrupt your business.
5. Customer Expectations to be Met in an M&A
During the M&A process, you will probably hear a lot about how the other company’s customers are completely satisfied with the products and services they are buying. After the deal closes, you need to discover whether that is true or not.
In terms of the immediate future, this will affect your revenue goals. If your customers are happy with current products and services, you can go on with business as usual. If many of them are not happy, though, you may need to return to the drawing board.
It can be difficult to make major changes just to keep your new customers happy. It’s best to learn about this sooner rather than later to help you retain some of your most important customers.
6. The Inevitable M&A Friction
No M&A deal is completely smooth. The deal is sure to upset some people, but you’re going to need to deal with the inevitable friction.
Some of that friction will be between employees. Workers will suddenly have to work alongside brand new teams, and some employees are going to butt heads. In other cases, employees may chafe under new management and make their displeasure known. In the case of redundancy, you may have to let many employees go.
Nothing will make this process easy, but you should brace yourself for uncomfortable conversations with employees who either voluntarily leave or who get laid off due to redundancy. Afterward, you may need to smooth things over with reassurances for the employees who stick around and are a good culture fit.
7. Unexpected Opportunities Arise From an M&A
Not everything is doom and gloom after an M&A deal closes. For example, you should be on the lookout for unexpected business opportunities.
On a micro-level, this is likely to happen with certain employees. Once some workers have new bosses and new opportunities, they may find new ways to shine. You should monitor this and promote rock star employees as needed.
On a macro-level, this may happen with your business as a whole. After an M&A deal closes, your business may be twice as big as it was before. This gives you twice the influence and twice the buying power, and you can make some big moves in the industry before your competition even sees it coming.
8. Heading Off Potential M&A Legal Battles
With any luck, the M&A deal will be a very straightforward process. However, it wouldn’t hurt to prepare yourself for potential legal battles.
Sometimes, a company will have a dispute over certain promises. For example, when one business promises their customers are happy and the customers are actually deeply unhappy, it may be enough to trigger a lawsuit. In other cases, there may be disputes over special earn out arrangements.
Nobody likes to plan for failure, but you should always be prepared for legal challenges after an M&A deal is completed.
Merge Smoothly with the Proper Before – and After – Preparation
A successful M&A can be accomplished with preparation before and after the merger happens. Now you know what to look for after the M&A deal is closed. But do you know where to find a company that truly values your talents and ambition?
Here at Confie, we are always ready to hire the best and prioritize leadership growth. To discover what we can do for you or your business, feel free to reach out online or just give us a call at 714-252-2500!
