Successful mergers are a result of addressing risk, compliance, and technology at multiple levels. Whether planning for a merger or working through integration issues, utilize the questions below to prepare your organization for success.
Risk
Effective mergers are an outcome of addressing risks at multiple levels. Key risk areas include:
- Organizational risk – How will the new entity be structured? Will the entities merge or operate independently?
- Financial risk – Can profits be maintained or losses mitigated? What drives profits and losses?
- People risk – How will talent preservation, leadership transition and corporate culture be managed?
- Control environment risk – Are internal controls adequate for the new organization structure? Who owns it?
- Process risk – Are business processes similar or will significant retraining be required?
- Post-merger integration risk – Are synergies achievable? Is the timeline too aggressive? Is there adequate internal support?
Compliance
Onerous rules and regulations must be considered. Most importantly:
- Are there cleared contracts triggering DSS notification requirements? Are there issues related to foreign ownership?
- How will the transaction impact FAR and CAS compliance? Will there be cost accounting practice changes
- Do intellectual property ownership of valuation issues exist?
- Are there Federal Supply Schedule Compliance issues? How will multiple schedules be harmonized post- transaction?
- Does historical DCAA, DOL, and other audit agency activity indicate issues? What is the current audit activity? How will risk related to open years be mitigated?
