In 2014 mergers and acquisitions in the US reached levels not seen since before the Great Recession. KPMG reported that in the first three quarters of 2014, 5,483 deals were announced. With a value of well over $1 trillion, this represents an increase of 33 percent over 2013.
At the same time, the number of IPOs in the same period was up 49 percent, some of which were private equity carve-outs. Instead of bringing two companies together, a carve-out spins off a division, allowing it to focus on a specific market or niche.
These activities have enormous effects on the financials of the companies involved. They have an equally large impact on their operations. For example, it requires migrating the IT infrastructure of one of the entities into the other. Merging or splitting the IT assets of multiple companies can strain an IT staff to breaking.
Whether merging, acquiring or carving out, your IT team has some work ahead of them. And they may need some help.
Unaffected IT departments are few
In almost every merger, the infrastructures of the companies are dissimilar. That means few IT departments walk away unscathed.
One company might use Microsoft desktops and servers, and the other uses laptops and Linux servers. Or one might use Salesforce and SQL Server, the other a home-grown solution and Oracle. One may resides in its own datacenter, the other in the cloud.
It’s a rare merger team that considers all these differences during its due-diligence. More often, these significant details are left to the IT departments to resolve after the event – ASAP.
How can you merge, migrate or separate all these assets in a timely manner, without risking the farm?
Who will plan and execute the restructuring?
M&As and carve-outs seem to happen every day, though not within the same companies. If they do, the companies tend to be large and well-staffed. As a result, they may have ample experience in handling such changes on an on-going basis.
For most companies, these events are infrequent. They don’t maintain staff with expertise in planning and managing migrations of networks, infrastructure, applications and data. For those, it’s advantageous to consult firms that can supply the needed expertise.
Even if you do have staff to execute the migration, seeking objective help with assessments, planning and risk management will pay for itself in peace of mind.
Where will the combined infrastructure live?
One of the first questions arises is: Where will the end solution reside?
Will the acquired IT assets be moved into the parent company’s datacenter? Will the parent require additional build-out or computing resources? Will the companies collocate in the same building? Or will both be moving to the cloud together?
Combining or separating computing resources, networks and security policies requires detailed planning. And detailed test plans and risk mitigation are vital prior to execution.
Can you tend the trees in the forest?
One unavoidable impact of a merger or a carve-out is change to your mail and office solutions.
Do the merging companies use different versions of Microsoft Exchange? Or does one use a Unix-based solution instead? Does the spun-off company need its mail, contacts and folders segregated from the parent’s Exchange domain?
Whether you use a Microsoft Exchange forest or another solution, the need is the same. You have to bring unity to disparate office, email and file systems.
Legacy systems or something new?
Besides separate email and contact stores, each company has its own set of back office applications. Some of these are:
- CRM and support
- Sales and lead management
- Marketing platforms
- Intranet / extranet
Some of these applications may be vendor packages, while others are home-grown. Either way, a merger leads to redundant systems. Which applications should remain, and which should be eliminated?
These decisions require a deep assessment of the applications and their databases to determine which are the new masters. Only then can you develop a migration plan for the applications, the data and the user profiles.
Ensuring a smooth transition
Companies are announcing mergers and acquisitions at the highest rate since 2007. These events don’t just affect the financial aspects of the companies involved. They require careful migration and integration of the backend systems that keep the companies operational.
If your IT resources are already stretched thin, you should consult experts with deep experience in planning infrastructure migrations. If you are considering moving to a managed IT services provider, select them carefully based on past performance.