DealLawyers.com Blog

Of all the challenges involved in a successful M&A transaction, post-deal integration is probably the hardest to get right – and effectively integrating key employees into the combined enterprise is often the hardest part of the integration process. This Foley blog provides some thoughts on how to get the “human factor” right. This excerpt discusses how to identify and manage talent:

Every business has mission-critical employees. Identifying and offering incentives to these employees can improve engagement in a transaction process and prevent an exodus of the most important talent. These types of incentives can take many forms, including retention bonuses, post-closing equity compensation, pre-negotiated employment and severance agreements, leadership opportunities, or clear paths for growth within the post-closing entity, and they can be offered to employees on both sides of the transaction. If certain employees will not be retained in the transaction, then handling their transition out of the business thoughtfully will also have a positive impact on overall morale.

The blog also emphasizes the importance of cultural due diligence during the M&A process in order to ensure that the cultures of the two parties align and recommends the use of individuals or teams of “cultural stewards” to identify issues that arise during the post-closing integration phase and keep employees aligned on shared values and goals.

– John Jenkins