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Practitioner's Complete Guide to M&As: An All-Inclusive Reference, with Website by David T. Emott

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Topic 52

Integration, Alignment, and Valuing Synergy Benefits

Topic 52 explores the scope of work required to do effective integration planning and synergy evaluation and the breadth of the issues involved. The integration challenge is to achieve postclosing alignment between the different views of two separate preclosing organizations to ensure achievement of the goals of the newly merged entity (Newco).

The reader is encouraged to take the time to read the text in conjunction with the referenced appendices to gain the appropriate level of understanding of the subject matter discussed in the narrative. Appendices are either presented at the end of this and each remaining Topic or are available for review and download on this book's companion Web site (see the About the Web Site page for login information).

INTRODUCTION-INTEGRATION PLANNING, SYNERGY EVALUATION

  • The basic task in effective integration planning and alignment is to determine what and who stays and what goes (people and facilities), when (milestones and timelines), and why (strategic and economic benefit) and to eliminate uncertainty and answer “why” questions of employees and constituents. Other tasks are to build support, eliminate rumors, communicate facts, as painful as they may be, and build trust in the management and direction of the company.
  • The basic task in synergy evaluation is to determine the annual free cash flow effect and net present value (NPV) arising from:
    • cost reduction initiatives associated with ...

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