28 Jul Post-transaction Integration & Alignment
Sometimes we hear stories from buyers and sellers that life post-transaction is not what they expected. The opportunity to ensure continuity of business priorities plus strategic and cultural alignment needs to happen during the due diligence cycle of a transaction. This is especially true if a seller is committing to an earn-out or incentives tied to the operation or performance post-close.
After the ink dries on the purchase agreement, the true colors behind the transaction could start to show. More often than not these differences surface during post combination planning, particularly budget allocation, organizational hierarchy, and key account mapping. The buyers almost always want to sink their teeth into the new shiny object and often without proper relationship management from the previous ownership/leadership. These situations can cause unrest and silos within the newly formed combined company which more times than not will result in missing expectations at a corporate level and most certainly will lead to attrition of top talent. Usually, the talent that was able to build a relationship with key accounts by knowing their business and putting in the time. These departures can lead to lots of challenges both on the account management side, customer retention, and potentially legal issues relating to untimely departures of leadership.
At Revenue Rocket we spend a fair amount of time working with both buyers and sellers ensuring post-transaction integration is properly planned and documented. This ensures that the expectations on both sides are met, that budgets align, and key team members and contributors are properly mapped to priorities based on what will create the least amount of disruption for the clients benefiting from the products and services offered by the parties.
In summary, it is crucial that you work with an advisor to properly document the strategic and operational priorities along with resources and responsibilities on both sides and ensure it ties out to the combined proforma that everyone is signing up for. An advisor will make sure 1+1=3 and be your advocate along the journey. Don’t let overreaching expectations or lack of communication deteriorate the value you saw when first engaging in the process.
For 20 years Revenue Rocket has been helping buyers and sellers along the journey through an acquisition and after the ink dries. Reach out anytime to see how we could help your IT services business: firstname.lastname@example.org.