How to Preserve Value in M&A Post-Acquisition

More often than not, the value gets destroyed during M&A. It takes both sides to work together to preserve the value of the acquired company post-close. Jay Dettling, CEO of Ansira, has been on both sides of the deal, being an acquirer and acquiree. In this article, let's talk about his experience on how to preserve value in M&A, regardless of transaction type. 

"Get through integration as fast as you can to remove ambiguity for both organizations because it's inevitable anyway. You might break some things, but the sooner you break them, the sooner you can fix them." - Jay Dettling.

The ethos of your organization

Preserving value in an acquisition starts with the ethos of the acquired company. There will be many decisions regarding how things will work and both organizations need to mutually agree. 

As the acquired company, protect and preserve what makes your company unique and prepare to relinquish some of the things that you hold dear. Knowing what your high priority elements are, is crucial to preserving the value of your organization. In turn, you will also be able to determine the things that you can allow to disintegrate.

The acquiring company should integrate as fast as possible while preserving the ethos of the organization. During this phase, focus on value creation decisions and integrate the back-office activities later. 

Communication 

Over communicating is the key to success. Both sides need to be transparent about everything from the very beginning.

The acquirer needs to communicate the planned changes early. The acquired company needs to know how things are going to change for them post-close. Answer questions like;

  • How will they operate? 
  • What happens to their equipment? 
  • What will happen to their brand? 
  • Are there any changes in their work structure? and many more.

Not knowing the answers to these questions creates fear, uncertainty, and doubt (FUD) in the acquired company you don't want as the buyer. 

Managing FUD

When people get acquired, there are a lot of unknowns. This results in fear, uncertainty, and doubt. Managing them includes developing trust and communication. As an acquiring entity, you need to be empathetic about what they are experiencing. The change management experience needs to be pleasant in order to help lower their anxiety.

Fast decision-making is also important. The faster you make decisions, the faster you get rid of their anxiety and make people feel empowered. To get alignment, everyone needs to understand the deal rationale. Decide what you are trying to achieve, your financial goals, and how you measure those goals. All of these things will drive decision-making. 

Advice for CEOs getting acquired

Getting acquired is often a one-time life event for CEO, founders, executives. But there's not a lot of references available for those CEOs that are going through a transaction. Jay shares excellent advice to help ensure business continuity post-acquisition. 

Think about your people first. There are many uncertainties all over the organization, and you need to worry about your team first. Make sure they are all comfortable during the transition and set them up for success. 

Work your way out of a job. Accept that you are no longer the captain of the ship. Over time, you will no longer be needed as a governance function, and you need to figure out your next career path. 

Dismantle the business that you've built. Help the acquiring company make a better organization to preserve the value of the business. Give your people the opportunity to be part of something that's going to be bigger.


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