Mergers and Acquisitions Toolkit

Overview and Approach

III. Build a
VI. Conduct the
I. Define your II. Identify Target Business Case IV. Conduct Due V. Execute
Post Merger
M&A Strategy Companies and Financial Diligence Transaction
Integration
Modeling

Frameworks Best Practices Templates

1
There are 3 main corporate growth strategies

1 2 3

Organic Growth Mergers and Strategic Alliances

Strategy Acquisitions Strategy Strategy

2
Organic Growth Strategy

Description Advantages Disadvantages

Often perceived as the • Provides deeper first-hand • Can be slow, expensive,
default growth option knowledge that is likely to and risky
be internalized in the
for companies, an • Difficult to use existing
company capabilities as the platform
organic growth
• Helps spread investment for major leaps in terms of
strategy relies on
over time and reduce innovation, diversification,
developing a upfront commitment or internationalization
company’s internal
• There are no availability
resources and
Organic Growth capabilities
constraints, that is to say
that the company is not
Strategy dependent on the
availability of suitable
acquisition targets or
potential alliance partners
• Strategic independence
• Creation of new activities
within the existing culture
environment

3
Mergers and Acquisitions Strategy

Description Advantages Disadvantages

Mergers and • Business extension: M&A can • Important investment
be used to extend the reach of upfront
acquisitions (M&A) a firm in terms of geography,
bring together products, or markets • Potential culture clash
companies through • Building capabilities: M&A between the 2 companies
complete changes in may increase a company’s • High failure rate
capabilities
ownership. They have • Sometimes excessive initial
• Increase market power by
been used by reducing competition and valuations, exaggerated
Mergers and companies for increasing bargaining power expectations of strategic fit,
centuries and remain a with suppliers and underestimated
Acquisitions
major way for • Increase efficiency: by problems of organizational
Strategy sharing resources and fit
companies to expand capabilities
rapidly • Speed: M&A allows acquirers
to act fast
• Financial efficiency: by
combining the 2 balance sheets
• Tax efficiency

4
Strategic Alliances Strategy

Description Advantages Disadvantages

Two companies share • Requires less • High failure rate (~50%)
resources and activities to commitment than other • Sometimes suffer from
pursue a common forms of expansion miscalculations in terms of
strategy. • Scale alliances can strategic and
In terms of ownership, provide economies of scale organizational fit
there are two main kinds
of strategic alliance: • Access alliances involve • The lack of control on
equity and nonequity a company allying in order either side can lead to
alliances. Equity alliances to access the capabilities particular issues of trust
Strategic of another company that and coevolution
involve the creation of a
Alliances new entity that is owned are required to produce or
Strategy separately by the partners sell its own products and
involved (e.g., joint services
venture). Nonequity • Complementary alliances
alliances do not involve involve companies
the commitment implied combining their
by ownership and are complementary capabilities
often based on contracts
(franchising, licensing)

5
This Toolkit will focus on Mergers and Acquisitions

1 2 3

Organic Growth Mergers and Strategic Alliances

Strategy Acquisitions Strategy Strategy

6
Main problem of the M&A strategy
More than half of M&As fail to reach their value creation objectives.

Mergers & Acquisitions’ ability to reach

value creation objectives*

45%

55%

Failure rate Success rate

*Consolidation of multiple surveys from New York Times, Harvard Business Review, and Australia Financial Review
7
Our solution
To increase your M&A success rate, our ex-Deloitte & McKinsey management consultants and JP
Morgan investment bankers have created a Mergers & Acquisitions Toolkit including 7 components.

Tools

Frameworks
Templates

Toolkit
Support from tier-1 Step-by-step
management consultants tutorials

Best Real-life
practices examples

8
Objectives
The M&A Toolkit includes frameworks, tools, templates, tutorials, real-life examples and best practices to
help you:
• Increase your M&A success rate with our 6-phase M&A approach: (I) Define your M&A strategy, (II) Identify target companies, (III)
Build a business case and financial modeling, (IV) Conduct due diligence, (V) Execute transaction, (VI) Conduct post-merger integration
• Define your M&A strategy: (1) Company mission, vision and values, (2) M&A strategic objectives and key performance indicators, (3)
M&A team, (4) M&A guiding principles, (5) Target screening criteria
• Identify target companies: (1) Potential target companies and data collection, (2) High-level assessment of potential target
companies, (3) Shortlisted potential targets, (4) Financial statements analysis, (5) Business valuation, (6) Targets approved for the
business case phase
• Build a business case and financial modeling: (1) Strategic benefit, (2) Feasibility, (3) Financial benefit, (4) Financial modeling to
estimate transaction cost, revenue synergy, cost synergy, net present value, ROI, and internal rate of return, (5) Letter of intent or term
sheet
• Conduct due diligence(CDD) to identify the likely future performance of a company: (1) Work plan including key business case
hypotheses and assumptions, (2) Due diligence to validate key hypotheses and assumptions, (3) Updated business valuation, (4)
Recommendation to make (or not) a formal offer to acquire the target company
• Execute transaction: (1) Deal structure, (2) M&A negotiations, (3) Signing and closing the M&A deal
• Conduct successful post-merger integration to ensure the company reaches its cost and revenue synergy targets: (1) Post-
merger integration strategy and high-level plan, (2) Post-merger integration detailed plans, (3) Implementation and monitoring

9
Approach
The Mergers & Acquisitions Toolkit includes a 6-phase approach that we have built and refined over the past 20 years through
constant trial and error. The good news is that you don’t have to waste your time, energy, and money going through that lengthy trial-
and-error process. You can simply leverage our work and customize it based on the specificities of your organization.

III. Build a Business

I. Define your M&A II. Identify Target IV. Conduct Due V. Execute VI. Conduct the Post
Case and Financial
Strategy Companies Diligence Transaction Merger Integration
Modeling

Pre-Announcement Announcement Post-Announcement

10
Approach
The Mergers & Acquisitions Toolkit includes a 6-phase approach that we have built and refined over the past 20 years through
constant trial and error. The good news is that you don’t have to waste your time, energy, and money going through that lengthy trial-
and-error process. You can simply leverage our work and customize it based on the specificities of your organization.

III. Build a Business

I. Define your M&A II. Identify Target IV. Conduct Due V. Execute VI. Conduct the Post
Case and Financial
Strategy Companies Diligence Transaction Merger Integration
Modeling

1. Company mission, 1. Potential target 1. Strategic benefit 1. Work plan including 1. Deal structure 1. Post merger
vision and values companies and data key business case integration strategy &
2. Feasibility 2. M&A negotiations
collection hypotheses & high-level plan
2. M&A strategic
3. Financial benefit assumptions 3. Signing and closing
objectives and key 2. High-level 2. Post merger
the M&A deal
performance assessment of 4. Financial modeling to 2. Due diligence to integration detailed
indicators potential target estimate transaction validate key plans
companies cost, revenue hypotheses and
3. M&A team 3. Implementation and
synergy, cost assumptions
3. Shortlisted potential monitoring
4. M&A guiding synergy, net present
targets 3. Updated business
principles value, ROI, and
valuation
4. Financial statements internal rate of return
5. Target screening
analysis 4. Recommendation to
criteria 5. Letter of intent or
make (or not) a
5. Business valuation term sheet
formal offer to
6. Targets approved for acquire the target
the business case company
phase

11
In the next slides, you’ll see a small preview of Phase I of our M&A
approach

III. Build a Business

I. Define your M&A II. Identify Target IV. Conduct Due V. Execute VI. Conduct the Post
Case and Financial
Strategy Companies Diligence Transaction Merger Integration
Modeling

1. Company mission, 1. Potential target 1. Strategic benefit 1. Work plan including 1. Deal structure 1. Post merger
vision and values companies and data key business case integration strategy &
2. Feasibility 2. M&A negotiations
collection hypotheses & high-level plan
2. M&A strategic
3. Financial benefit assumptions 3. Signing and closing
objectives and key 2. High-level 2. Post merger
the M&A deal
performance assessment of 4. Financial modeling to 2. Due diligence to integration detailed
indicators potential target estimate transaction validate key plans
companies cost, revenue hypotheses and
3. M&A team 3. Implementation and
synergy, cost assumptions
3. Shortlisted potential monitoring
4. M&A guiding synergy, net present
targets 3. Updated business
principles value, ROI, and
valuation
4. Financial statements internal rate of return
5. Target screening
analysis 4. Recommendation to
criteria 5. Letter of intent or
make (or not) a
5. Business valuation term sheet
formal offer to
6. Targets approved for acquire the target
the business case company
phase

12
We identified 5 [insert your own number] M&A guiding principles

Insert title of your

1 guiding principle (e.g.,

Simple decision-making
process
Insert a quick description of your guiding principle (e.g., Ensure that decision-making and approval procedures are
simple, robust and transparent)

Insert title of your

2 guiding principle (e.g.,
Strategic alignment)
Insert a quick description of your guiding principle (e.g., Ensure strategic alignment between the company vision and
mission and the M&A strategic objectives)

Insert title of your

3 guiding principle (e.g.,
Shared vision)
Insert a quick description of your guiding principle (e.g., Establish joint ownership of a shared vision, strategy, and
journey between our company and the acquired company)

Insert title of your

4 guiding principle (e.g.,
Key talent)
Insert a quick description of your guiding principle (e.g., Pay attention to retaining key talents)

Insert title of your

5 guiding principle (e.g.,
Internal rate of return)
Insert a quick description of your guiding principle (e.g., Focus on transactions with an i nternal rate of return (IRR) that
delivers an acceptable margin above cost of capital)

13
We identified 5 [insert your own number] screening criteria to help us
select the right companies to potentially acquire
This is an example. Replace this text
using your own criteria.

Strategic alignment The acquisition of the target company

needs to help us reach at least one of
our M&A strategic objectives
The target company needs to Revenue
have a revenue above $10M

Market The target company needs to sell its

products mainly in the Asian market

The target company needs to have Positioning

a premium positioning and good
reputation
Acceptable impact on the group’s
Risk financial and non-financial risk
profile

14
In the next slides, you’ll see a small preview of Phase II of our M&A
approach

III. Build a Business

I. Define your M&A II. Identify Target IV. Conduct Due V. Execute VI. Conduct the Post
Case and Financial
Strategy Companies Diligence Transaction Merger Integration
Modeling

1. Company mission, 1. Potential target 1. Strategic benefit 1. Work plan including 1. Deal structure 1. Post merger
vision and values companies and data key business case integration strategy &
2. Feasibility 2. M&A negotiations
collection hypotheses & high-level plan
2. M&A strategic
3. Financial benefit assumptions 3. Signing and closing
objectives and key 2. High-level 2. Post merger
the M&A deal
performance assessment of 4. Financial modeling to 2. Due diligence to integration detailed
indicators potential target estimate transaction validate key plans
companies cost, revenue hypotheses and
3. M&A team 3. Implementation and
synergy, cost assumptions
3. Shortlisted potential monitoring
4. M&A guiding synergy, net present
targets 3. Updated business
principles value, ROI, and
valuation
4. Financial statements internal rate of return
5. Target screening
analysis 4. Recommendation to
criteria 5. Letter of intent or
make (or not) a
5. Business valuation term sheet
formal offer to
6. Targets approved for acquire the target
the business case company
phase

15
Based on our M&A strategy, we identified 20 [insert your own number]
potential target companies, including the 10 listed below

Number of
CEO Main activity Revenue Profit Market share Strategic rationale
employees

Insert your own Insert your own Insert your

Insert company name text
Insert your own text
text own text
Insert your own text Insert your own text Insert your own text

You can replace the column header

Insert your own Insert your own Insert your
Insert company name text
Insert your own text
text own text
Insert your own text based
Insert your ownon
text what information you
Insert your own want
text to
emphasize.
Insert your own Insert your own Insert your
Insert company name text
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text own text
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Insert your own Insert your own Insert your

Insert company name text
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text own text
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text own text
Insert your own text Insert your own text Insert your own text

Insert your own Insert your own Insert your

Insert company name text
Insert your own text
text own text
Insert your own text Insert your own text Insert your own text

Select the top companies you want to

Insert your own Insert your own Insert your
Insert company name emphasize. text If someone wants to see the
Insert your own text
text own text
Insert your own text Insert your own text Insert your own text
more comprehensive list, open the
Insert company name ExcelInsert
sheet your“Target
own companies”
Insert your own text
Insert your own Insert your
Insert your own text Insert your own text Insert your own text
text text own text

Insert your own Insert your own Insert your

Insert company name text
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text own text
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text own text
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To access a more comprehensive list of our potential target companies, open the Excel sheet “Target companies”
16
 Company X
Summary of our financial statement analysis Company Y
Profitability ratios Company Z
For more details on how to conduct a financial
statement analysis, open the folder “Financial
statement analysis”
Worst peer Best peer
5% 8% 9%
Return on sales
(%)

2% 4% 8%
Return on equity
(%)

X% X% X%

Return on net assets (%)

X% X% X%
Return on capital
employed(%)

X% X% X%
Return on funds
employed(%)

17
In the next slides, you’ll see a small preview of the Phase III of our M&A
Approach

III. Build a Business

I. Define your M&A II. Identify Target IV. Conduct Due V. Execute VI. Conduct the Post
Case and Financial
Strategy Companies Diligence Transaction Merger Integration
Modeling

1. Company mission, 1. Potential target 1. Strategic benefit 1. Work plan including 1. Deal structure 1. Post merger
vision and values companies and data key business case integration strategy &
2. Feasibility 2. M&A negotiations
collection hypotheses & high-level plan
2. M&A strategic
3. Financial benefit assumptions 3. Signing and closing
objectives and key 2. High-level 2. Post merger
the M&A deal
performance assessment of 4. Financial modeling to 2. Due diligence to integration detailed
indicators potential target estimate transaction validate key plans
companies cost, revenue hypotheses and
3. M&A team 3. Implementation and
synergy, cost assumptions
3. Shortlisted potential monitoring
4. M&A guiding synergy, net present
targets 3. Updated business
principles value, ROI, and
valuation
4. Financial statements internal rate of return
5. Target screening
analysis 4. Recommendation to
criteria 5. Letter of intent or
make (or not) a
5. Business valuation term sheet
formal offer to
6. Targets approved for acquire the target
the business case company
phase

18
Document Purpose

The purpose of this document is to provide enough information to answer the question “should we acquire the
company [insert company name]?” To answer this question, we will use an M&A framework that includes 3
components:

There are many M&A frameworks that

you could use. Based on our
experience, this is the most practical
Financial Benefit one.

Strategic
Feasibility
Benefit

19
Each component has an underlying question that we will have to answer to
identify if it is a good strategic initiative to acquire company Y

What would be the financial benefit of the deal?

Financial Benefit

Strategic
What would be the strategic Feasibility What would be the feasibility of the deal?
benefit of the deal? Benefit

20
If the answer is “high” or “very high” to the 3 questions, then it means that
acquiring company Y is a good strategic initiative

What would be the financial benefit of the deal?

Financial Benefit

Strategic
What would be the strategic Feasibility What would be the feasibility of the deal?
benefit of the deal? Benefit

Sweet spot

21
Let’s start by assessing the strategic benefit of the deal

What would be the financial benefit of the deal?

Financial Benefit

Strategic
What would be the strategic Feasibility What would be the feasibility of the deal?
benefit of the deal? Benefit

22
 Caption: Very Low Low Medium High Very High

Strategic Benefit
What would be the strategic benefit of the deal? Very High

Replace this rating with your own

rating based on the sections below

Vision and
strategic Insert in this box the way in which this deal will help us deliver on our long-term vision and strategic objectives.
objectives

M&A strategy
versus organic Insert in this box the way in which acquiring company Y is a better option than an organic growth strategy.
growth strategy

M&A strategy
versus strategic Insert in this box the way in which acquiring company Y is a better option than a strategic alliance with company Y.
alliance
 s
hot
n s
ee
S cr

See below a screenshot of our financial model.

24
In the next slides, you’ll see a small preview of Phase IV of our M&A
approach

III. Build a Business

I. Define your M&A II. Identify Target IV. Conduct Due V. Execute VI. Conduct the Post
Case and Financial
Strategy Companies Diligence Transaction Merger Integration
Modeling

1. Company mission, 1. Potential target 1. Strategic benefit 1. Work plan including 1. Deal structure 1. Post merger
vision and values companies and data key business case integration strategy &
2. Feasibility 2. M&A negotiations
collection hypotheses & high-level plan
2. M&A strategic
3. Financial benefit assumptions 3. Signing and closing
objectives and key 2. High-level 2. Post merger
the M&A deal
performance assessment of 4. Financial modeling to 2. Due diligence to integration detailed
indicators potential target estimate transaction validate key plans
companies cost, revenue hypotheses and
3. M&A team 3. Implementation and
synergy, cost assumptions
3. Shortlisted potential monitoring
4. M&A guiding synergy, net present
targets 3. Updated business
principles value, ROI, and
valuation
4. Financial statements internal rate of return
5. Target screening
analysis 4. Recommendation to
criteria 5. Letter on intent or
make (or not) a
5. Business valuation term sheet
formal offer to
6. Targets approved for acquire the target
the business case company
phase

25
Example of hypothesis

The Target Company’s profit

forecasts provided by the
Board are reasonable

26
Example of assumptions that must be true to validate our hypothesis

The projected Revenue is reasonable

The Target Company’s profit

forecast provided by the Board The projected COGS is reasonable
is reasonable

The projected Operating Cost is reasonable

27
Example of sub-assumptions that must be true to validate our
assumptions

There is no illogical trend between historic

revenue and projected revenue

The company core capabilities will support

The projected Revenue is reasonable
the future revenue growth

The revenue drivers have been identified

correctly and projected in a reasonable way

The Target Company’s profit

forecast provided by the Board The projected COGS is reasonable
is reasonable

The projected Operating Cost is reasonable

28
Once you’ve got your “Hypothesis tree” with your hypothesis,
assumptions, sub-assumptions, etc., it’s time to create your work plan

Work plan to validate or invalidate your first hypothesis

Work Plan
Hypothesis #1: The Target Company profit forecast provided by the Board is reasonable
Expected Actual
Assumptions & Sub-assumptions Analyses Data Sources End Product Responsibility Deadline
answer Answer

1. The projected Revenue is reasonable TRUE TRUE See sub-assumptions below See sub-assumptions below See sub-assumptions below Raphael October 5

1a. There is no illogical trend between historic revenues and Compare Historic and forcasted
TRUE TRUE Financial Due Diligence Vertical Histogramme chart Raphael October 5
projected revenues revenue CAGR

1b. The company core capabilities will support the future Compare Historic and forcasted
TRUE TRUE Financial Due Diligence Vertical Histogramme chart Raphael October 5
revenue growth revenue CAGR

1c. The revenue drivers have been identified correctly and Compare Historic and forcasted
TRUE TRUE Financial Due Diligence Vertical Histogramme chart Raphael October 5
projected in a reasonable way revenue CAGR

Check list of key revenue drivers

2. The projected COGS is reasonable TRUE FALSE Industry report Driver tree John October 10
identified by the management

3. The projected Operating Cost is reasonable

For more details,

open the Excel sheet
“Work Plan”

29
In the next slides, you’ll see a small preview of Phase V of our M&A
approach

III. Build a Business

I. Define your M&A II. Identify Target IV. Conduct Due V. Execute VI. Conduct the Post
Case and Financial
Strategy Companies Diligence Transaction Merger Integration
Modeling

1. Company mission, 1. Potential target 1. Strategic benefit 1. Work plan including 1. Deal structure 1. Post merger
vision and values companies and data key business case integration strategy &
2. Feasibility 2. M&A negotiations
collection hypotheses & high-level plan
2. M&A strategic
3. Financial benefit assumptions 3. Signing and closing
objectives and key 2. High-level 2. Post merger
the M&A deal
performance assessment of 4. Financial modeling to 2. Due diligence to integration detailed
indicators potential target estimate transaction validate key plans
companies cost, revenue hypotheses and
3. M&A team 3. Implementation and
synergy, cost assumptions
3. Shortlisted potential monitoring
4. M&A guiding synergy, net present
targets 3. Updated business
principles value, ROI, and
valuation
4. Financial statements internal rate of return
5. Target screening
analysis 4. Recommendation to
criteria 5. Letter of intent or
make (or not) a
5. Business valuation term sheet
formal offer to
6. Targets approved for acquire the target
the business case company
phase

30
 Structuring the deal
Overview*

There are many ways in which a corporate merger or acquisition may be structured. The goal is not to create the most complex structure, but rather to create a structure that
reflects the objectives of the buyer and the seller fairly.
On a fundamental level, all structures are either mergers or acquisitions, including the purchase or consolidation of either stocks or assets.
At the heart of each transaction are the following key issues that will affect the structure of the deal:
• How will tangible and intangible assets be transferred from the seller to the purchaser?
• At what price will they be transferred, and according to what terms?
• What issues discovered during due diligence may affect the price, terms, or structure of the deal?
• What liabilities will be assumed by the purchaser?
• What are the tax implications for the buyer and the seller?
• What role will the seller have in the management and growth of the underlying business after closing?
• To what extent will third-party consent or government filing or approval be necessary?
• What arrangement will be made for the key management team of the seller, who may not necessarily be among the selling owners of the company?
• Does the buyer currently have access to all of the consideration to be paid to the seller, or will some of these funds need to be raised from debt or equity markets?
And at the heart of each structural alternative are the following 4 basic questions:
1.Will the buyer be acquiring the stock or the assets of the target?
2.In what form will the consideration from the buyer to the seller be made (e.g., cash, notes, securities, or some other form)?
3.Will the purchase price be fixed, contingent, or payable over time on an installment basis?
4.What are the tax consequences of the proposed structure for the acquisition?

* Source: Book “Mergers & Acquisitions from A to Z” by Andrew J. Sherman, which we highly recommend 31
Structuring the deal
Stock versus asset purchases

Stock purchase advantages and disadvantages

Main advantages Main disadvantages

• There is less flexibility to cherry-pick key

• Preserves the right of the buyer to use the assets of the seller.
seller’s name, licenses, and permits. • This structure usually does not terminate
Buyer’s perspective
• Provides continuity of corporate identity, existing labor union collective bargaining
contracts, and structure. agreement(s) and generally results in the
continuation of employee benefits plans.

• The seller is taxed only on the sales of stock. • The seller cannot pick and choose the assets
to be retained.
• Any gain or loss is usually capital in nature.
Seller’s perspective • A loss on the sale of stock may not be
• It does not leave the seller with the problem of recognized by a corporate shareholder who
disposing of assets that were not bought by included the company in its consolidated
the purchaser. income tax return.

32
In the next slides, you’ll see a small preview of Phase VI of our M&A
approach

III. Build a Business VI. Conduct the

I. Define your M&A II. Identify Target IV. Conduct Due V. Execute
Case and Financial Post Merger
Strategy Companies Diligence Transaction
Modeling Integration

1. Company mission, 1. Potential target 1. Strategic benefit 1. Work plan including 1. Deal structure 1. Post merger
vision and values companies and data key business case integration strategy &
2. Feasibility 2. M&A negotiations
collection hypotheses & high-level plan
2. M&A strategic
3. Financial benefit assumptions 3. Signing and closing
objectives and key 2. High-level 2. Post merger
the M&A deal
performance assessment of 4. Financial modeling to 2. Due diligence to integration detailed
indicators potential target estimate transaction validate key plans
companies cost, revenue hypotheses and
3. M&A team 3. Implementation and
synergy, cost assumptions
3. Shortlisted potential monitoring
4. M&A guiding synergy, net present
targets 3. Updated business
principles value, ROI, and
valuation
4. Financial statements internal rate of return
5. Target screening
analysis 4. Recommendation to
criteria 5. Letter of intent or
make (or not) a
5. Business valuation term sheet
formal offer to
6. Targets approved for acquire the target
the business case company
phase

33
Post-Merger Integration 3-phase approach
To help you conduct your post-merger integration, we created a 3-phase approach that we have built and refined over the past 20 years
through constant trial and error. The good news is that you don’t have to waste your time, energy, and money going through that lengthy trial-
and-error process. You can simply leverage our work and customize it based on the specificities of your organization.

Phase I: Define & Communicate the Phase II: Develop & Communicate the
Phase III: Implement & Monitor
Strategy & High-Level Plan Detailed Plans

1. Merger strategic objectives 1. Day 1 readiness checklist 1. Status of post-merger integration high-level plan
2. Integration management office 2. Integration & synergy initiatives plan 2. Day 1 readiness checklist status
3. Guiding principles 3. Change management strategy and plan 3. Status of integration and synergy initiatives
4. Post merger integration high-level plan 4. Communication strategy and plan 4. Status of change management strategy and plan
5. Organizational structure (Top layers) 5. Culture integration strategy and plan 5. Status of communication strategy and plan
6. Top management appointment 6. Risk management strategy and plan 6. Status of culture integration strategy and plan
7. Training to help managers set up their team 7. Staffing & retention plan 7. Status of risk management strategy and plan
8. Integrated synergy baseline 8. Status of staffing and retention plan
9. Synergy targets 9. Integration lessons learned
10.Potential integration & synergy initiatives 10. Institutionalization of the updated PMI Toolkit
11.Business cases and financial models
12.Integration & synergy initiatives prioritization

34
In the next slides, you’ll see a small preview of Phase I of our
Post Merger Integration Approach

Phase I: Define & Communicate the Phase II: Develop & Communicate the
Phase III: Implement & Monitor
Strategy & High-Level Plan Detailed Plans

1. Merger strategic objectives 1. Day 1 readiness checklist 1. Status of post-merger integration high-level plan
2. Integration management office 2. Integration & synergy initiatives plan 2. Day 1 readiness checklist status
3. Guiding principles 3. Change management strategy and plan 3. Status of integration and synergy initiatives
4. Post merger integration high-level plan 4. Communication strategy and plan 4. Status of change management strategy and plan
5. Organizational structure (Top layers) 5. Culture integration strategy and plan 5. Status of communication strategy and plan
6. Top management appointment 6. Risk management strategy and plan 6. Status of culture integration strategy and plan
7. Training to help managers set up their team 7. Staffing & retention plan 7. Status of risk management strategy and plan
8. Integrated synergy baseline 8. Status of staffing and retention plan
9. Synergy targets 9. Integration lessons learned
10.Potential integration & synergy initiatives 10. Institutionalization of the updated PMI Toolkit
11.Business cases and financial models
12.Integration & synergy initiatives prioritization

35
 a te
pl
m
Te Don’t reinvent the wheel here. Most
Our strategic objectives for the merger are: of the strategic objectives should
have already been written prior to the
deal.

1 Replace this text with your own text

2 Replace this text with your own text

3 Replace this text with your own text

4 Replace this text with your own text

5 Replace this text with your own text

6 Replace this text with your own text

36
 e
pl
am
Ex

The most common strategic objectives for mergers are:

Example we used during a PMI
consulting project we carried out for a

1
Global Fortune 1000 firm.
Gaining economies of scale

2 Entering a new country

3 Entering a new market

4 Increasing the company’s product or service portfolio

5 Increasing market share by acquiring one of your competitors (horizontal integration)

Becoming a key player in an industry by acquiring one of your suppliers or clients (vertical
6 integration)

37
We decided to create an Integration Management Office that will be
responsible for the success of the integration
The Integration Management Office will oversee the post-merger integration and be responsible for its success. It
includes 7 [replace this number with your own number] executives representing both [insert name of the acquiring
company] and [insert name of the acquired company]:

This is only an example. You may

decide to emphasize different areas
Integration Management
and adjust the size of the integration
Officer
Management Office.
[Insert name]

Integration and Change

Communication Culture Risk Management Training
Synergy Initiatives Management
[Insert name] [Insert name] [Insert name] [Insert name]
[Insert name] [Insert name]

38
 a te
pl
m
Te
We identified 8 [insert your own number] guiding principles for post
merger integration

1 Insert your own guiding principle

2 Insert your own guiding principle

3 Insert your own guiding principle

4 Insert your own guiding principle

5 Insert your own guiding principle

6 Insert your own guiding principle

7 Insert your own guiding principle

8 Insert your own guiding principle

39
 e
pl
am
Ex

Top 8 commonly used guiding principles for post merger integration

Example we used during a PMI

1 Be clear on the strategic objectives of the deal consulting project we carried out for a
Global Fortune 1000 firm.

2 Ground the integration in the objectives of the deal

3 Be clear on your synergy baseline and targets

Create a robust integration plan to reach the strategic objectives of the deal and the synergy
4 targets

5 Search for synergies in every function of the newly created organization

6 Communicate on a regular basis to all stakeholders

7 Ensure cultural fit

8 Maintain business momentum

40
 s
hot
n s
ee
S cr

See below 4 screenshots from Phase I.

High-Level Plan - Phase 1 Lean Business Case

Prioritization Matrix Synergy Target Breakdown

41
In the next slides, you’ll see a small preview of Phase II of our
post merger integration approach

Phase I: Define & Communicate the Phase II: Develop & Communicate the
Phase III: Implement & Monitor
Strategy & High-Level Plan Detailed Plans

1. Merger strategic objectives 1. Day 1 readiness checklist 1. Status of post-merger integration high-level plan
2. Integration management office 2. Integration & synergy initiatives plan 2. Day 1 readiness checklist status
3. Guiding principles 3. Change management strategy and plan 3. Status of integration and synergy initiatives
4. Post merger integration high-level plan 4. Communication strategy and plan 4. Status of change management strategy and plan
5. Organizational structure (Top layers) 5. Culture integration strategy and plan 5. Status of communication strategy and plan
6. Top management appointment 6. Risk management strategy and plan 6. Status of culture integration strategy and plan
7. Training to help managers set up their team 7. Staffing & retention plan 7. Status of risk management strategy and plan
8. Integrated synergy baseline 8. Status of staffing and retention plan
9. Synergy targets 9. Integration lessons learned
10.Potential integration & synergy initiatives 10. Institutionalization of the updated PMI Toolkit
11.Business cases and financial models
12.Integration & synergy initiatives prioritization

42
 n
tio
r a
ust
ill
Day 1 Readiness Checklist

Weeks

Owner Due date Status -9 -8 -7 -6 -5 -4 -3 -2 -1 0

Prepare internal communications AD March 12 Done

   
Prepare external communications Aurelien F. Jan 20 Done
 
Define pricing policy Christian G. Feb 28 Done
 
Integrate general ledger George P. March 31 Done
 
Prepare welcome drink for new employees George P. March 31 On Track
 
Adjust sales pitch Christian G. March 31 Late
 
Align marketing messages George P. March 31 On Track
 
Define the synergy targets George P. March 31 Late
 
Integrate brands On Track

Integrate products and services On Track

Integrate reporting On Track

Define employee retention strategy Late

Rationalize employee compensation Late

Insert name of activity Late

43
The Day-1 Readiness Checklist often includes many activities that will
better fit in an Excel document

Open the Excel document “1b. Day-1

Readiness Checklist” for more details

44
 s
hot
n s
ee
S cr

See below 4 additional screenshots from Phase II.

Change Impact Assessment Matrix Communication Strategy & Plan

Stakeholder Analysis Matrix Culture Integration Strategy

45
In the next slides, you’ll see a small preview of Phase III of our
Post Merger Integration Approach

Phase I: Define & Communicate the Phase II: Develop & Communicate the
Phase III: Implement & Monitor
Strategy & High-Level Plan Detailed Plans

1. Merger strategic objectives 1. Day 1 readiness checklist 1. Status of post-merger integration high-level plan
2. Integration management office 2. Integration & synergy initiatives plan 2. Day 1 readiness checklist status
3. Guiding principles 3. Change management strategy and plan 3. Status of integration and synergy initiatives
4. Post merger integration high-level plan 4. Communication strategy and plan 4. Status of change management strategy and plan
5. Organizational structure (Top layers) 5. Culture integration strategy and plan 5. Status of communication strategy and plan
6. Top management appointment 6. Risk management strategy and plan 6. Status of culture integration strategy and plan
7. Training to help managers set up their team 7. Staffing & retention plan 7. Status of risk management strategy and plan
8. Integrated synergy baseline 8. Status of staffing and retention plan
9. Synergy targets 9. Integration lessons learned
10.Potential integration & synergy initiatives 10. Institutionalization of the updated PMI Toolkit
11.Business cases and financial models
12.Integration & synergy initiatives prioritization

46
To ensure proper execution of the integration and synergy initiatives, it is very
important to appoint high-caliber initiative owners or project managers

The main challenge of the different initiative owners or project managers will be to meet the objectives while
balancing the triple constraints of quality, cost, and time

Quality

Meeting the
expectations

Project Manager
Completing the
Managing a budget
project in a
and resource
specific time of
frame
Time Cost limitations

47
 s
hot
n s
ee
S cr

See below 4 additional screenshots from Phase III.

Governance Initiative Status Report

Risk Management Framework Communication Plan

48
 Structure of the Toolkit
The M&A Toolkit includes 500 Powerpoint slides, 70 Excel sheets, and 7 Word pages categorized into 7
folders that you can download on your device immediately after your purchase.

+ +
500 editable Powerpoint slides* 70 editable Excel sheets* 7 Word pages

1 2 3 4 5 6 7

0. Overview and I. M&A Strategy II. Target companies III. Business Case IV. Due V. Transaction VI. Post Merger
Approach and Financial Model Diligence Execution Integration

*Please note that the number of PowerPoint slides and Excel sheets listed is the number of unique slides and sheets. For example, a PowerPoint slide
that has been duplicated to facilitate our clients’ understanding only counts for 1 slide.

49
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