Leveraging AI in post-merger integration: the first 100 days
For companies and private equity firms acquiring new businesses as part of a larger M&A strategy, post-merger integration must become a capability, not just a one-time event.
The first 100 days after a merger or acquisition are critical, and artificial intelligence (AI) can help facilitate a smooth and effective integration. Technology has a role to play in enabling synergy as business units combine and align their strategic priorities.
Technology and data are central to successful integration and management, alongside traditional human resources and financial performance metrics. A robust governance and operating model, supported by AI-driven efficiency, can ensure that the transaction reaches and exceeds the anticipated outcomes.
Don’t leave the success of a deal to chance — be prepared.
Our post-merger integration checklist supports you in planning the integration, from day 1 to day 100.
How to accelerate post-merger integration with AI
A successful post-merger integration begins with AI-enabled due diligence. The clarity achieved during due diligence flows into the first 100 days and enables effective value creation.
The more quickly and effectively the two companies’ operations can be integrated, the more likely the deal’s top-line growth potential will be realized. Delays in integrating the new business unit set back the realization of the benefits of the merger or acquisition.
The integration team should be formed between the signing and closing of the deal, and include C-suite finance officers, IT, sales, and customer experts.
Post-merger integration begins during due diligence
AI can help to streamline post-merger integration, starting with due diligence. With rapid insights and well-organized information, plus the ability to rapidly search and summarize using AI, supplier contracts, policy, and procedure can be analyzed, gaps identified, and a comprehensive plan put in place to ensure success.
With AI tools inside a transactional virtual data room, the informational silos and gaps between the two companies can be closed. From translating documents to redaction, document sorting, and analysis, AI features can streamline the due diligence process so teams can focus on higher-value activities like identifying gaps, opportunities, and strategic alignments.
All of the financial and operational information gleaned during the due diligence process will inform the approach to integration. Inside a virtual data room, sell-side and buy-side documentation and processes can be linked, so the transition from due diligence to integration is smooth.
With AI, more information can be surfaced and organized, so that when the acquirer gains full visibility at deal closure, there are no surprises. With all the available information surfaced, the leadership team is in the best possible position to take in new information and create a robust integration plan.
Identify and prioritize value-creation opportunities
AI can assist in identifying hidden opportunities in commercial and finance function integration that can generate cash flow and benefit working capital.
Achieving cost savings is just a small part of the synergy of combining companies — the true value will come from expanding into new markets, creating new products or services, and growing sales.
The initial financial gains from cost savings can be realized quickly, recouping the premium the buyer has paid for control of or to purchase the acquisition. Achieving top-line gains enables the combined company to do more than simply recover costs; it can then realize the maximal deal value in the second and third horizon phases. This is critical in a high-interest rate environment where capital comes with a higher cost.
Rapid cash optimization
Cash optimization is a critical activity of the first 100 days to ensure liquidity and accurately identify where to improve cash generation. This means analysing and assessing potentially hundreds of supplier contracts, previously a labor-intensive and time-consuming process.
Large language models, paired with traditional AI tools, can parse huge volumes of text and identify particular clauses. When used by an experienced team, AI tools can support faster cash flow optimization, improve forecasting, and reduce idle cash.
Make decisions using data, not emotion
One key to a successful first 100 days is ensuring that decisions are data-driven, not emotional. The period immediately following a merger can be charged and even fraught. Leadership must stay calm and establish a culture of relying on data, setting up the combined company for success and clarity as operations combine and align strategically.
Centralizing all data, including the data not available until the deal closes, immediately, is the first step to enabling rapid, data-driven decision-making that brings teams together. This might mean migrating data into a common schema through a transitional period, before reintegrating with a unified core transaction system.
Put customers first
The customers are often the final stakeholders to find out about a transaction, and without a clear plan to engage, communicate, and serve these stakeholders, customer confidence may decline. This is a risk, especially for B2B companies where the sales cycle can be long.
Further, while the due diligence process typically surfaces a lot of information about the target company, its finances, and operations, it may not surface a complete picture of the target’s customers.
Establishing integrated software and operations, especially for sales, and unified cybersecurity as a top priority can help customer confidence. An integrated view of the customer experience and sales processes can help to manage expectations and ensure intact sales processes, providing a central, interim source of truth. This allows time for the slower CRM integration process, which can take much longer.
With a complete view of the customers, a communications strategy can address key concerns, and the combined company can identify the best opportunities to drive revenue through new services and product offerings.
Successful integration needs proven technology that enables data-driven decision making
Integration planning must begin early, during the due diligence process. One way to make post-merger integration planning easier is to choose a transactional platform with purpose-built integration workflows that can guide deal teams right through the deal process, from target scoping and deal preparation, through due diligence and the first 100 days following a deal.
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