Background

• A technology company had tentatively agreed to acquire a $20 million private software company but had a short time in which to perform due diligence and determine integration issues.

Problems

• The private company did not have any of its financial, product, market or legal information prepared for review. Consequently, each request from the client generated new work for the private company's limited staff, significantly slowing the process.
  
  
• The acquirer had never completed a major acquisition and did not have an organized effort to accomplish due diligence.

Resolutions

• Functional teams were established to generate a coordinated list of questions to assure there was no overlap and that all topics were covered, which streamlined the process and reduced redundancy.
  
  
• Preliminary integration issues were highlighted and assigned to functional teams for consideration.
  
  
• Teams met daily in-person or by phone for brief reviews of due diligence status and to discuss any new issues that developed.
  
  
• An integration plan was established in advance of the acquisition closing and authorized by senior management at both the client and private company. This included:
  
  
  • Termination of all repetitive personnel effective at the close
  • Assignment of sales territories and accounts
  • A detailed product development strategy
  • Financial plan for the new entity
  • Communications approach for employees, customers and investors
    
    
• The merger integration proceeded smoothly because advance work allowed management to focus on running the combined business immediately after closing.