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December 12, 2022

How to Get Strategic Alignment During M&A Integration

Integrating an acquired company is one of the most daunting tasks in M&A. Integration never goes as planned, but there are things that teams can do to make it much easier for everyone involved.  In this article, Don Yakulis, Global Head of M&A Integration at Light and Wonder, discusses the importance of achieving strategic alignment from both teams during M&A integration. 

"Doing an integration is disruptive, and you want to move relatively quickly. In many cases, you can only do that if both teams are aligned on where you're headed." - Don Yakulis

According to Don, the integration leader must communicate with everyone and ensure alignment on both sides of the deal. There are three key people that the integration lead must work with: the deal team, the business sponsor, and the target leadership.

Alignment with the deal team

Understanding the deal’s objective is imperative for integration leaders and they must work closely with the deal team. Knowing the deal’s north star will help integration leaders facilitate the functional teams focusing on diligence. When there is better team alignment, integration teams can also start planning integration during kickoff meetings.   

The integration team can also greatly influence the deal model by providing insights about integration costs. The integration lead knows the costs and resources required to achieve deal value drivers and must be involved pre-LOI.

Alignment with business sponsor

The next step is to align with the business unit sponsor. They champion the deal in terms of their vision, its importance, and how they can benefit from it. One of the biggest challenges when working with a business sponsor is securing the necessary time and dedication required for integration. Too often, the business sponsor is solely focused on getting the deal done because they need to run a business.

The key is to find the next best person qualified to make decisions on the leader's behalf. The candidate needs to be available to have recurring conversations at least 10 hours a week. This person should be involved in the business's day-to-day operations and is a trusted right hand to the business sponsor. 

Depending on the business, this person could be a product head, COO, or chief-of-staff.  

Alignment with target leadership

The importance of alignment with the target leadership is often overlooked. Without alignment, things tend to fall apart because the target leadership might be operating in a different direction against the deal's north star.

Misalignment can lead to mistrust and misunderstanding. If the target company doesn't understand the deal rationale, people might become angry once changes are implemented. The only way for integration to move smoothly is if the target leadership is on the same page with what the acquirer is trying to achieve. 

The integration team must communicate and coordinate with the incoming team early on in the transaction. Don also likes to gather everyone right before closing and and go through the deal rationale, diligence findings, and the 90-day integration plan to ensure alignment for faster execution.

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