The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level (JOSSEY-BASS BUSINESS & MANAGEMENT SERIES)

338 Pages·2007·1.62 MB·English

by  Timothy J. Galpin

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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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
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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
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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
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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
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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
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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.