🔒 Seal #6 – “It’s not our business”-syndrome.
Post Merger Integration – a closed book!?
Demystifying the world of PMI. – Seal no. 6
🔒 Seal #6 – “It’s not our business”-syndrome.
The following seals around the book of Post Merger Integration represent the best-of from my collection of reasons not to do a reasonable Post Merger Integration I heard. Here it comes:
“The next owner can take care of that!”
So, you’re planning to exit in a couple of years to a secondary. OK, it’s smart to leave some fruits on the table to stimulate the appetite. But you shouldn’t have them still up in the trees – especially the low hanging fruits.
Don’t forget about the proof of concept! I’ve personally gone through numerous DDs and read tons of Information Memorandums. So many times, it’s the same story: “We haven’t realized this – be it growth, optimization, innovation, you name it – for the last 7 years, but – yeah - we are firmly convinced that it will come true once you have taken control.” Honestly, I doubt that.
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You’ve got to harvest some of the effects and provide the proof of concept!
Secondly, putting all eggs in the basket of multiple arbitrage is very likely not to work any longer. Times are tougher now. Cheap money is over. There have been really great times, the more or less 15 years following the GFC, two generations of funds. As Bob Dylan already said: The times they are a-changin'.
While putting together a bunch of organizations or adding them to a platform without integrating them properly, you are creating a good deal of complexity within the system. And this will cost you value. For details, please see Seal #1 Resisting financial synergies. We’ve put a nice exhibit there which opens eyes.
To reduce this complexity and to recover this value, there is only one way: Post Merger Integration.
The good news? It’s rarely too late. If you want to learn about deferred integration. We are going to share our perspective on that later. (If you can’t wait, get in contact with us.) Let’s open the book. Share the message of Post Merger Integration (aka 👍 “Like” this post) and join our PMI Community, i.e. follow The Hardt Group GmbH .
Stay tuned, we are about to unveil the last seal round the closed book of Post Merger Integration.
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