The Complete Guide to Mergers and Acquisitions PDF
Preview The Complete Guide to Mergers and Acquisitions
Galpin.ffirs 4/17/07 3:16 PM Page i The Complete Guide to Mergers and Acquisitions P R O C E S S T O O L S T O S U P P O R T M & A I N T E G R A T I O N A T E V E R Y L E V E L S E C O N D E D I T I O N Timothy J. Galpin Mark Herndon Foreword by Jon Katzenbach John Wiley & Sons,Inc. Galpin.ffirs 4/17/07 3:16 PM Page iv Galpin.ffirs 4/17/07 3:16 PM Page i The Complete Guide to Mergers and Acquisitions P R O C E S S T O O L S T O S U P P O R T M & A I N T E G R A T I O N A T E V E R Y L E V E L S E C O N D E D I T I O N Timothy J. Galpin Mark Herndon Foreword by Jon Katzenbach John Wiley & Sons,Inc. Galpin.ffirs 4/17/07 3:16 PM Page ii Copyright © 2007 by John Wiley & Sons,Inc.All rights reserved. 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Readers should be aware that Internet websites offered as citations and/or sources for further information may have changed or disappeared between the time this was written and when it is read. Limit ofLiability/Disclaimer ofWarranty:While the publisher and author have used their best efforts in preparing this book,they make no representations or warranties with respect to the accuracy or completeness ofthe contents ofthis book and specifically disclaim any implied warranties ofmerchantability or fitness for a particular purpose.No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation.You should consult with a professional where appropriate.Neither the publisher nor author shall be liable for any loss ofprofit or any other commercial damages,including but not limited to special,incidental,consequential,or other damages. Jossey-Bass books and products are available through most bookstores.To contact Jossey-Bass directly call our Customer Care Department within the U.S.at 800-956-7739,outside the U.S.at 317-572-3986,or fax 317-572-4002. Jossey-Bass also publishes its books in a variety ofelectronic formats.Some content that appears in print may not be available in electronic books. Library ofCongress Cataloging-in-Publication Data Galpin,Timothy J.,date The complete guide to mergers and acquisitions :process tools to support M&A integration at every level / Timothy J.Galpin,Mark Herndon;foreword by Jon Katzenbach.—2nd ed. p.cm. Includes bibliographical references and index. ISBN 978-0-7879-9460-0 (cloth) 1.Consolidation and merger ofcorporations—Management. I.Herndon,Mark,date II.Title. HD2746.5.G35 2007 658.1'62—dc22 2007011154 Printed in the United States ofAmerica second edition HB Printing 10 9 8 7 6 5 4 3 2 1 Galpin.ffirs 4/17/07 3:16 PM Page iii T H E J O S S E Y - B A S S B U S I N E S S & M A N A G E M E N T S E R I E S Galpin.ffirs 4/17/07 3:16 PM Page iv Galpin.ftoc 4/17/07 3:17 PM Page v C O N T E N T S Foreword:Making Sense ofMerger Mania ix Jon Katzenbach Preface xi The Authors xv ONE Integration: The Real Deal 1 Buyer Beware! 2 Why Deals Are Done 4 Integration:An Experience-Driven Skill Set 6 The Deal Flow Model 7 TWO Integration Begins with Due Diligence 21 Redefining the Process ofDue Diligence 24 Due Diligence and Compliance with the Sarbanes-Oxley Act of2002 28 Due Diligence and Strategic Integration Risk Factors 35 Due Diligence and Organizational Culture 38 Due Diligence and Human Capital 48 Coordinating HR into the Due-Diligence Process 50 THREE Welcome to the Big Leagues of Change Management 57 Organizational Dynamics Created by M&As 58 Concepts ofChange Management 59 v Galpin.ftoc 4/17/07 3:17 PM Page vi FOUR The Merger Integration Work-Streams Model 73 Overview ofthe Merger Integration Work-Streams Model 75 The Critical Role ofExecutive Leadership 78 Deploying the Model 84 FIVE Organizing, Involving, and Coordinating Integration Task Forces 91 Establishing the Integration Infrastructure 92 Launching the Planning Process 96 Managing the Integration Project 109 SIX Tell It Like It Is: Honest Communication 117 Communication Models for a Merger 119 Knowledge Before New Skills 126 SEVEN Don’t Let Them Jump Ship: Retaining and “Rerecruiting” Your Key People 127 Identifying Key People 129 Understanding What Motivates People 129 Developing and Executing an Action Plan 133 EIGHT Setting the Organization Cures Many Ills: Structure and Staffing Decisions 143 Common Problems 145 Ten Principles 147 Fair Processes 161 Staffing Process Models 163 NINE Keeping Track of Success: Merger Measurement Systems 175 Integration Measures 178 Operational Measures 184 vi Contents Galpin.ftoc 4/17/07 3:17 PM Page vii Process and Cultural Measures 187 Financial Measures 196 TEN “But They’re So Different”: Cultural Integration 205 Defining Organizational Culture 207 Discovering,Inventing,and Delivering Cultural Integration 208 Answering Key Questions 213 Sticking to the Implementation Plan 217 Continuous Management ofCultural Integration 217 ELEVEN Human Capital Integration and the Human Resources Function 219 The “Making Strategy Work”Model 222 Case Studies in Human Capital–Related Integration 225 TWELVE Merger Repair 235 Symptoms 239 Merger Integration Results Assessment 239 Two Tracks ofMerger Repair 242 THIRTEEN Keys to M&A Success 247 Does a Structured Approach to M&A Integration Work? 247 Recommendations for Success 250 Developing a Sustained M&A Capability 252 Avoiding “Killer”Phrases 254 RESOURCE A: Sample Task Force Charter 257 RESOURCE B: Integration Planning Template 265 RESOURCE C: The Current State of M&A Integration 285 References 293 Index 296 Contents vii Galpin.ftoc 4/17/07 3:17 PM Page viii To my family,who have supported me throughout. —T.G. To Andrea and Natalie Grace Your love and laughter have sustained me through many intense merger assignments. —M.H.
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