Mergers, acquisitions, and divestitures are a constant in today’s business environment. The knowledge, skills and experience needed to accomplish them effectively is a strategically important capability, even a core competency for most companies today, as buyers and sellers of companies, divisions, or discrete business units. Many companies and their IT departments fail to understand the typically deeply disruptive implications of M&A transactions and too often treat them as just another project. Our executive advisors and program managers have deep experience in IT Integration, which is very often the single most time-consuming and resource-intensive aspect of an M&A transaction.
In M&A integration projects, execution speed is often one of the most important factors in minimizing risk to deal value. Because IT is often the most expensive of all integration projects, it has to be managed by experienced IT Integration program and project management professionals to deliver cost synergies and avoid expensive delays. This is nowhere truer than in Private Equity transactions where timely synergy realization is essential to deal value and long-term value creation.
Strategy and Readiness
DivIHN provides assessments of the scope, scale, and risks of IT Integration for acquisition targets from the earliest stages of growth strategy formulation, including target qualification, to pre-announcement and pre-close due-diligence, to complete integration planning. Our assessment approach is always tailored for the industry, the scope and scale of the acquisition, the acquisition objectives, and the transaction timeline. Even before an acquisition target is identified, we assist acquirers in assessing and raising the level of readiness. We tailor company-specific IT Playbooks for acquisitions, sourcing and sharing tools and templates, making organizational and technical readiness recommendations, and team training. We similarly work with companies seeking to divest businesses or business units by assessing their technical and organizational landscape and identify potential roadblocks to successful divestiture.
Based on our deep experience with IT integration in M&A transactions, we bring numerous proven tools, techniques, and templates in the form of an IT Integration Playbook for M&A which can be adapted for your organization’s current integration initiative or as a governance and program management asset for future integration initiatives. In Private Equity transactions, where speed is often the top priority, the ability to quickly adapt past experience through a customizable Playbook, helps preserve and create deal value.
DivIHN delivers public and private training programs in IT M&A, ranging from Executive Briefings and short sessions on the role of IT in M&A for CIOs and direct reports, to extensive, multi-day training for technical leadership. DivIHN further brings their expertise to bear by adapting the materials and methods from these programs to private, focused on-premises sessions for any IT team preparing for an acquisition or divestiture.
Transaction Management, Pre-Announce, and Pre-Close
In general, IT Due Diligence is the process of discovering synergy potential, dis-synergy risks, integration easy wins and potential roadblocks. In broad terms, it is the process of assessing the scope and scale of the IT Integration effort and the high-level needs for transitional services. IT Due Diligence requires a broad high-level understanding of the target organization’s IT footprint. It does not require an exhaustive, detailed inventory of every element of the target’s IT footprint. It does not require a set of four-inch ring binders full of completed checklists. Both initial and confirmatory IT Due Diligence require a methodical approach, and above all the judgment of those experienced in this type of discovery, assessment, and requirements gathering. DivIHN’s advisors provide this experience and expert judgment to acquirers. DivIHN can also assist divesting companies through this process by understanding the acquirer’s needs and providing guidance about what to disclose, and when and how to disclose it.
Transitional Services Agreement (TSA)
Integration in M&A rarely happens overnight. After a carve-out deal closes, the seller continues to operate certain business functions, delivering a variety of business and IT services to the sold unit. Before closing, drawing on lessons learned from previous work and best practices, our experts guide acquirers and divesting companies in the development of the IT portions of these important and frequently complex governing agreements – “Transitional Service Agreements” or “TSAs” and associated Statements of Work and schedules of services. The TSA and supporting SOWs and schedules normally go into effect immediately after closing. After closing, during the Integration and Stabilization period, DivIHN’s IT integration experts work with buyer and seller to coordinate the delivery of TSA-related services, handle exceptions and escalations, and ultimately terminate services and close out the agreements at the end of the transition period.
Integration and Post-Close Stabilization
A DivIHN program manager provides oversight, monitoring and the controlling of the several related work streams in integration, typically as part of or in cooperation with an Integration Management Office (IMO). Our clients use this oversight to support project-level activity to ensure the integration and stabilization program goals are met. While each project may also have a project manager, the program manager provides a decision-making capacity that cannot be achieved at the project level. In a program there is a need to identify and manage cross-project dependencies and to have sufficient insight into the risks, issues, requirements, design or solution to be able to orchestrate the program as a whole.
The program manager further works with the IMO to manage these interdependencies with the other business integration work streams. Our program and project managers are notably adept at integrating resources of multiple backgrounds and organizations, often with disparate organizational cultures and governance requirements into an effective whole.
DivIHN project managers provide the discipline of initiating, planning, executing, controlling, and closing the work of a project team to meet specific success criteria. The primary challenge of project management is to achieve all of the project goals within the primary constraints of scope, time, quality and budget.