M&A Integration Glossary
Deal Rationale & Strategy
Deal Thesis – The core investment logic explaining why the acquirer is buying the target (e.g., growth, synergies, market entry).
Strategic Fit – The degree of alignment between acquirer and target in markets, capabilities, products, or culture.
Value Creation Levers – Specific drivers that generate incremental value (e.g., revenue synergies, cost synergies, tax optimisation).
Platform Acquisition – A large, foundational acquisition used as a base to roll up additional targets.
Bolt-on Acquisition – A smaller acquisition that complements or strengthens an existing business line.
Market Entry Acquisition – Buying into a new market/geography rather than organic build-out.
Transaction & Financial Concepts
Enterprise Value (EV) – The total value of a business (equity + debt – cash).
Equity Value – The value attributable to shareholders after debt/cash adjustments.
Purchase Price Allocation (PPA) – Accounting process of allocating the deal price across tangible and intangible assets.
Goodwill – Intangible premium paid above fair market value, often linked to brand, customer relationships, or expected synergies.
Transaction Services Agreement (TSA) – Temporary services provided by the seller to the buyer post-close (e.g., IT, payroll).
Earn-Out – Contingent consideration tied to future performance.
Working Capital Adjustment – Post-close adjustment based on agreed working capital levels at closing.
Due Diligence
Commercial Due Diligence (CDD) – Assessing market position, growth potential, and competitive dynamics.
Financial Due Diligence (FDD) – Verifying historical and projected financial performance, quality of earnings, and risks.
Operational Due Diligence (ODD) – Evaluating supply chain, production, IT, and workforce efficiency.
Legal Due Diligence – Reviewing legal liabilities, contracts, and compliance obligations.
Cultural Due Diligence – Assessing leadership styles, employee behaviours, and cultural alignment.
Integration Planning
Integration Management Office (IMO) – The central governance structure overseeing all integration activities.
Day 1 Readiness – The level of preparedness for the first day after legal close (communications, systems, people).
100-Day Plan – Detailed actions to deliver early wins and stabilise operations in the first 3 months.
Integration Roadmap – Phased plan that sets priorities, milestones, and timelines for full integration.
Workstreams – Functional integration areas (e.g., HR, Finance, IT, Operations, Sales & Marketing).
Change Management – Structured approach to help employees adapt to new ways of working.
Synergy Realisation Office – A sub-team focused on identifying, tracking, and delivering synergies.
Synergies & Value Capture
Cost Synergies – Value from reducing duplicate overhead, procurement savings, site rationalisation, etc.
Revenue Synergies – Value from cross-selling, upselling, expanding distribution, or innovation.
Dis-Synergies – Negative financial impacts (e.g., customer churn, cultural clashes, disruption).
Run-Rate Synergies – The steady-state, recurring annualised benefit after full integration.
One-Off Costs – Non-recurring integration costs (e.g., severance, IT migrations, consultancy).
Benefits Tracking – Systematic monitoring of synergies delivered vs. forecast.
People & Culture
Retention Packages – Incentives offered to retain key employees post-close.
Leadership Alignment – Ensuring the new leadership team is unified and aligned on strategy.
Cultural Integration – The process of blending norms, behaviours, and working styles.
Talent Flight Risk – Likelihood of losing key staff during transition.
Employee Value Proposition (EVP) – The promise of what employees receive in exchange for their work.
Technology & Operations
IT Systems Integration – Merging ERPs, CRMs, HRIS, and data platforms.
Data Migration – Transferring and reconciling records between acquirer and target systems.
Business Continuity – Safeguarding against operational disruption during transition.
Operating Model – The way an organisation delivers value (processes, people, governance, systems).
Process Harmonisation – Aligning workflows and standards across entities.
Governance & Risk
Clean Team – A third-party or firewall-enabled team that reviews sensitive competitive information pre-close.
Antitrust Approval – Regulatory clearance to avoid competition law breaches.
Risk Mitigation Plan – Framework for managing integration risks (financial, operational, cultural).
Separation Risks – Risks when divesting carved-out units, e.g., stranded costs.
Measurement & Outcomes
Deal Value Case – Quantified financial rationale for the acquisition (cost/revenue synergies, growth).
Integration KPIs – Metrics to measure progress (synergy delivery, retention, system cutovers).
EBITDA Uplift – Increase in earnings resulting from synergies.
Cash Conversion – Ability to turn EBITDA into operating cash flow post-integration.
P&L Outcomes – The realised impact on profitability and revenue compared to the deal thesis.
Post-Deal Review – Assessment of whether strategic and financial objectives were achieved.