Post-merger integration as a key factor for successful acquisitions
An acquisition is far from over with the signing of a contract – what then follows is the important process of integration. This is why High-Tech Gründerfonds (HTGF) is offering a think tank on this topic at the High-Tech Partnering Conference in February. The aim of the think tank is to discuss the topic with experts from different viewpoints. In this interview, Anke Caßing and Axel Nitsch, both principals at HTGF, provide a bit of background on the planned format.
You are planning a think tank on post-merger integration (PMI). Can you give us a brief introduction? What exactly is it about?
Axel: Numerous studies indicate that many companies fail to achieve the goals they set themselves with an acquisition. In this context, post-merger integration is often an important aspect.
Anke: In the many preliminary discussions we have held with experts, we have clearly seen that successful post-merger integration takes place at various levels. Examples include the rapid standardization of accounting and reporting, the integration of process landscapes and, above all, the merging of different cultures from two separate companies. This is why such a merger is a highly complex process. It is important to look at it from different angles.
Are there typical processes that characterize a PMI?
Anke: First of all, such an integration is very specific to each company. There are numerous factors and influences that determine the course and nature of such a PMI. For example, there are acquisitions that entail a clear transfer of technology. A large company acquires the know-how of a start-up, and the integration subsequently focuses on how the buyer can develop its own product from this technology. The focus is clearly on knowledge transfer.
Axel: It’s different when taking over an existing business model, for example. A young company or a start-up has turned an innovation into a product and has already established itself in a market. Here, acquisitions are aimed at taking over the entire business model. Of course, finances and reporting also need to be consolidated, which can happen rather quickly. But depending on how deeply the company is to be integrated, culture plays a decisive role.
Why is this topic so important to you?
Anke: One of HTGF’s goals is to connect large and medium-sized companies with start-ups. Even though we as HTGF are no longer involved in the integration after an exit, we think it is important to shed more light on the topic for our portfolio companies and potential buyers. We want to give the opportunity to share experiences at the conference: What do you have to pay attention to? What are mistakes that can be avoided? That’s exactly what we want to take a closer look at during this think tank.
Axel: The topic is often given too little attention, as was repeatedly pointed out to us during our preparations. Often, not enough time and resources are allocated to the complex process of post-merger integration. The conference is aimed at partnerships between established industrial companies and innovative start-ups. Acquisitions are clearly part of this and the HTGF network includes many professionals with a lot of relevant experience. We want to share some success stories and practical approaches that can be put into action.
Who will be the guests at the event?
Axel: Our aim is to bring together experts from different areas. We look forward to welcoming Ralf Temporale, Head of Strategy, Consumer & Operations, Talent Partner at EY, who has directly supported many such integrations. He will certainly have a lot to tell us about the integration of branding, culture and employees.
We will also talk to Sven Hänchen, Business Development Manager at Wolters Kluwer, an information services provider from the Netherlands. Acquisitions are an integral part of their business strategy. He will also provide valuable insights and talk about the depth of integration – an important aspect of PMI.
Anke: We are looking forward to welcoming Sara Khan, VP of Legal Affairs at LTN Global, one of the leading media technology companies. We will also be joined by Bernd Gross, who will be able to report from his first-hand experience. His IoT company Cumulocity was acquired by Software AG in 2017 – today he is CTO of Software AG.
Axel: He will also address the topic of incentivization. What incentives does a company offer to retain or even change a management team? This important aspect is underestimated all too often.
And why do you refer to this format as a think tank?
Anke: Because we look at the topic from different angles. We start with short keynote speeches delivered by the experts. Here, we get an initial insight into their experiences. We then jump into a panel discussion and delve deeper into the various aspects.
Axel: And of course we also want to engage in discussion with the conference participants. A format like this thrives on discussion. After all, our aim is to have a comprehensive exchange of experiences in which everyone can learn from each other and take away important impulses.