IT Best Practices for Financial Managers

Chapter 19. Effective Approaches for Managing IT during a Merger, Acquisition, or Divestiture

Anna Y. Lea Doyle

So, you've got a merger, acquisition, and divestiture (MA&D) transaction facing you. As a result, you are probably wondering what the big deal is and how it is different from a typical information technology (IT) project. Well, there are three key differences that a financial executive should know about prior to launching the IT portion of the transaction:

1. New terminology

2. Faster pace

3. New challenges for IT

The IT department will face pressures from familiar and new angles. In this chapter, we will explore each of these differences and introduce new concepts for you to consider in your efforts to manage your MA&D deal from an IT perspective.

New Terminology

Mergers, acquisitions, and divestitures come with language that may be new to IT as well as to the rest of the organization. Table 19.1 provides some of the key terms with which the IT area must be familiar.

There may be slight variations in the application of these terms from deal to deal; therefore, it is important to consult with your corporate development team to be aligned in the use of the MA&D terminology for your organization.

Faster Pace

MA&D deals typically move quickly through due diligence (identify risks, likely synergies, and high-level integration strategy and timeline), slow down through bid and negotiation processes, and then accelerate to deal close and Day 1. In the due diligence and preparation for deal close ...