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The integration of the target, a key element of a build-up - Governance & Strategy > Finance function

The integration of the target, a key element of a build-up – Governance & Strategy > Finance function

“Unfortunately, in too many build-up strategies, one + one = less than two. The acquirer comes out of this addition with a little more than one and the company resumed with much less than one. It is very damaging since ultimately there is indeed a loss of overall value”, analyzes Michel Rességuier, president of Prospheresleaders, specializing in the management of companies faced with major transformations. This is all the more damaging in a Covid context where build-ups are multiplying, encouraged by the current abundance of liquidity.

The expert in business transformation points the often excessive attention paid by the acquiring company to its sole vision to the detriment of the specificities specific to the companies taken over”. It’s a bit, he explains, as if the buyer were idolizing himself by believing that : what worked for his company must necessarily succeed for the target. Too many buyers arrive in a posture of world champion. » The consequences can be disastrous. Both for the target and for the buyer.

What is an integration?

A loss of technical expertise and process failures are the consequences of a failed integration. Why ? Because poor integration can generate failures in processes, whether technical or commercial. ” A new commercial policy applied without consultation can lead to loss of customers. In the same way for technical processes: a process carried out in a company A is not necessarily adaptable to the same in a company B »continues Michel Rességuier.

And the damage can be even greater on human resources of the company. The expert from Prospheresleaders thus cites the example of this paper mill which had bought another and which had brutally reassembled all the support functions in the parent company. At the same time transforming the target into a simple place of production, creating value simply by the economies of scale that it allowed. “There happened a sharp degradation in performance. The employees of the acquired company felt humiliated, dispossessed, and inevitably a loss of motivation, and therefore of performance, followed. »

This drop in motivation can even go as far as pure and simple loss of skills with departures of employees. “In companies where human heritage prevails, in tech for example or in services, the risk of skills drain is significant”agrees Lionel Gouget, former financial director, now associate director at Valtus, a leader in interim management. “But these failed integrations are far from inevitable, many are perfectly conducted and create real additional wealth for both parties. »

The keys to a successful integration

No instructions, nevertheless warns the associate director of Valtus. But essential points not to be overlooked. In the first place : preparing for this integration. “You have to know how to give yourself a little time to properly analyze the needs for centralization, pooling and adaptation of practices, but without expecting too much either. And you have to know where to stop in integration. There is a extremely important part of human. » The expert therefore recommends do not immediately break the rituals specific to the target (Friday breakfast for example) while “nor allowing economic nonsense to linger too long”. Objective : strike the delicate balance so that both parties develop together. ” It’s necessary rsucceed in creating a corporate meta culture common which is not created at the expense of the target. A meta pride of belonging to the same group. »

More and more buyers are aware of this human aspect, observes Guillaume Briant, associate lawyer at Stephenson Harwood. “A few years ago, you could buy a company without worrying too much about the integration process. Now it is has become a major point. » In this process, taking into account the future involvement of the seller and his management is essential. “Beyond human compatibility, several techniques can be used. For instance, the incentive of sellers to the future performance of the company. Vendors will therefore have an interest in facilitating good integration. A phased purchase can also be considered. » For employees, it may be profit-sharing or free shares.

Michel Rességuier, for his part, advises setting up a external managerappointed specifically and temporarily for this integration mission, and who will have to ensure protect the interests of the target, without game of ambition since he will have to leave the group. This will have to co-construct integration. In any case, whatever the scenario chosen, for Clotilde Billat, associate lawyer at Stephenson Harwood, “the subject of future governance and of its role in the integration must be mentioned very early in the negotiation process. »

The role of Daf in this difficult equation

In this delicate equation, what part can the financial director take? ? “He musttake on the role of business partner and not be content with your Excel spreadsheet, replies Lionel Gouget. He has a very important mission because he carries part of the integration: finance, IT, etc. He must be aware of your role as an ambassador. » And to recommend : “when the operational integration phase is activated, on the ERP, payroll, accounting for example, it must learn to show empathy, do not arrive by overturning the table. Nevertheless, he must go to the end of his mission so that the acquisition bears full fruit. It’s a delicate balance, so you have to choose your battles. » For example, don’t steer teams straight away on expense reports that would only save a few cents.

3 Questions to Justin Bignon, co-director of Batibig

After 14 acquisitions in 18 months, Batibig has a turnover of €75 million and relies on 465 employees.

How to properly integrate all these companies close to your historical profession?

The holding company pools information systems, best practices in cybersecurity for example, service providers such as lawyers or chartered accountants, CSR policy, shared responses to major calls for tenders, etc. It’s non-negotiable. On the other hand, the brands are maintained because we believe in their relevance. Their values ​​and cultures are important.

Concretely, what is your recipe?

It is out of the question that Batibig sticks to a pre-established model. The virtuous path of build-ups exists. We learn from each other and we don’t arrive by breaking all the traditions. If a company is in the habit of giving the bridges for the month of May, for example, it will continue.

What is your policy regarding the new management of the target?

It can be an external manager, a group manager, or a pair/trinomial with “incubation” of future directors. each time, we carry out an important reflection on the subject in order to find the right balance. And we associate these managers with capital.

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