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December 30, 2022 5 minute read

Project Management in M&A

Mergers and acquisitions are complex projects with considerable room for error. Therefore, overseeing a successful M&A deal requires much insight, planning, and organization. M&A project management can be very specialized and requires some pre-planning. 

Having a competent project manager in M&A to keep the deal on track is vital. The entire M&A process touches virtually every aspect of the business, involving various employees and third-party specialists. However, none is as mission-critical as the project manager since they’re responsible for shepherding the deal from beginning to closing.

What Does M&A Project Management Entail?

Those involved with M&A project management work backward from a clearly defined end goal, creating smaller stepping-stone objectives as they go. In this way, they turn seemingly unwieldy projects into a series of more easily accomplished tasks. Due to the immense size, scale, and scope of most M&A deals, project managers must be willing to communicate with stakeholders across departmental lines to ensure teams and individuals are keeping up with their responsibilities and meeting their goals and deadlines.

A core aspect of project management in M&A is ensuring business continuity, as the merger process can be incredibly disruptive for day-to-day business operations. For example, because layoffs, reorganizational shuffles, and culture clashes are part and parcel of the M&A process, project managers may have to work with reticent and distracted staff members. In addition, aligning individual and team goals with the company’s needs may need to be clarified, as new corporate hierarchies and shifting targets can spread uncertainty and confusion throughout the organization.

Complex M&A deals can last years and comprise hundreds of individual projects. An effective project manager will smooth out deals by assisting with the following:

● Realistic pricing strategies

● Organizational alignment

● Clearly defined roles

● Prioritizing the most important activities

● Smoothing out stakeholder communication

● Aiding with staff and customer retention

M&A Project Manager Responsibilities

An M&A project manager’s responsibilities are holistic, touching on virtually every aspect of the deal, from financial to organizational to legal and tax aspects. In addition, project managers assign and track key performance indicators to measure the project’s welfare and success. Other responsibilities include keeping in touch with all involved parties — acting as a liaison with accountants, customer support, C-suite executives, sales, marketing, compliance, and others. Generally, a project manager’s duties are roughly split into pre- and post-merger responsibilities.

Pre-Merger Responsibilities

Pre-merger responsibilities center around evaluating and vetting eligible companies to select the right business to acquire. From conducting SWOT analyses to due diligence, project managers involved in every stage of the pre-merger process. While numerous tasks are undertaken before the merger, painting in broad brushstrokes reveals three key responsibilities:

  • Company fit: Determine whether the business you’re examining fits your company’s stated aims. Look at culture match, complementary productive assets, and goal fit. Ask yourself if acquiring this company will allow you to realize important synergies such as cost savings or cross-selling opportunities.
  • Valuation and negotiation: Creating an accurate valuation is complex and time-consuming. Consider using an industry-leading software solution like Devensoft to assist in the valuation process. It’s important to remember that over-inflated valuations are one of the leading causes of M&A deal failure, so arriving at an accurate walk-away number is of the utmost importance before beginning negotiations. Once you have that number in hand, negotiations can begin in earnest.
  • Stakeholder approval: Business processes demand less breadth and depth from stakeholders than M&A deals. Therefore, establishing proper governance while assigning roles and responsibilities is a major aspect of project management. During and after the negotiation process, constant communication is needed to ensure everyone is on the same page. Good governance dictates that individuals with authority are consulted, and permission is sought when appropriate.

Post-Merger Responsibilities

After the merger, project manager duties shift to encompass the integration process. Core responsibilities include:

● Business integration

● Creating new organizational hierarchies

● Goal setting

● Fostering positive communications with key stakeholders

● Performance monitoring

● Resource allocation

● Bridging workplace cultures

● Achieving planned synergies

In the aftermath of a merger, employees often feel nervous and uncertain about their position in the workplace. To soften concerns and keep productivity and morale high, energize your team with incentives, rewards, and praise as you work toward post-merger success.

Remind your team about your company’s mission. Clarity is key, especially with so many changes flying. Keeping your lines of communication open and educating your team on the goals and reasoning behind the M&A will help keep everyone on track. Smooth cultural differences and execute planned redundancies and layoffs before moving forward with total M&A integration.

Effective M&A Project Management Implementation

Prior to implementing your M&A project strategy, create a project charter. This short document will summarize the project while clearly defining goals and scope. Then, working backward from the primary objective, the project manager will create smaller project benchmarks consisting of tasks and more detailed subtasks. At this point, responsibilities include creating deadlines, creating cost estimates, researching risk mitigation, and allocating assets.

Effective execution starts with assigning responsibilities to the involved parties. Also, creating a keystone source from which to disseminate information becomes vital. That’s where customizable M&A software such as Devensoft comes into play. As a result, your teams can communicate and organize their essential data and documents in one place.

Specialized software allows project managers to easily: 

● Track deals

● Conduct due diligence

● Track synergy

● Create reports and analytics

● Communicate with team members

● Track and manage divestitures 

● Track and manage integrations

● Manage important documents

● Stay abreast of legal compliance matters

Project managers typically work from an acquisition plan as they move forward. This detailed roadmap breaks down the project into clearly defined and easily manageable chunks. An acquisition plan typically includes a page-long executive summary outlining the merger’s key features. A target description follows, outlining the business’s core strengths and attractive features. 

Next comes a market overview emphasizing demographics and whether customer needs are being met. Then, the sales and marketing section will outline current approaches to each sector, while the financial history and projections will set out the company’s recent financials. Finally, a transition plan and deal structure will round out the roadmap.

Phase-Gate Methodology

Project managers may embrace a phase-gate methodology. Under this approach, can be put into phases. Each stage comes with a set of criteria defining stated goals. After completion, you transition to the “gate phase,” to conduct a review. This agile approach to project management allows for flexibility while maintaining a relatively simple, linear process to project management. Unlike the popular waterfall method, which entails a more rigid linear project management methodology, phase-gate allows for greater flexibility which is vital for a process as complex and subject to change as the average M&A deal.

Also, consider using an integration management office (IMO). Your IMO is a temporary home base that is a central hub for coordinating business integration activity. Sometimes dubbed a “war room,” this office provides a physical space for individuals to plan and collaborate as the integration process moves forward.

Benefits to M&A Project Management

Firms accrue several benefits from effective project management. Here are some of the most valuable ones:

  • Cost savings
  • A smooth transition 
  • Higher workplace morale
  • Clearly defined goals
  • Ongoing review and analysis 

A strong project manager ensures that the M&A process proceeds smoothly, meet the KPIs, and workplace morale and productivity remain high. But, of course, project managers need help to do this. That’s why providing your team with comprehensive M&A management software is essential. Meet with a Devensoft professional to discuss your business’s needs and how Devensoft can help streamline your M&A process.

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