Waiting until the day after tomorrow
“We're not starting the integration yet. There are more add-ons in the pipeline, and we'll know more in two months.” This — or something similar — is what many CEOs pursuing a buy-&-build strategy are currently saying.
Although some add-ons have already been acquired, further takeovers are still pending. If you begin integration now, how will you handle the next acquisitions? The first integration isn’t even complete, and the next closing is already imminent.
One option is to integrate the new acquisition alongside the ongoing process. Another is to put the company on hold for now. But if you start too early, you won’t be able to incorporate insights from future acquisitions into the process.
“So it makes no sense to start now.” Right? In the end, you just keep waiting — until the day after tomorrow.
It is not uncommon
Buy-&-build strategies have become an integral part of many private equity investments. No wonder — the low-hanging fruits are particularly rock bottom here. However, this no longer refers to the classic multiple arbitrage that once seemed almost automatic: larger company, higher multiple.
It was a self-reinforcing effect, almost like a perpetual motion machine or a sleight of hand. Today, that alone is no longer enough. To increase the multiple now, real integration is required — leveraging synergies within the growing organization. Without a targeted allocation of resources, the desired effect won’t be achieved. Yet, despite the additional effort, the investment is worthwhile.
This raises a crucial question: When should integration start? And when new companies are continuously being added, how can they be incorporated into an ongoing integration process?
But buy-&-build strategies aren’t the only path to multiple acquisitions. Traditional growth strategies today also rely on both organic and inorganic expansion — such as add-ons, where suitable companies are acquired. And often, these involve more than just one or two.
Even companies that aren’t actively pursuing expansion face this challenge. Demographic trends are creating numerous succession opportunities that are hard to ignore. Failing to seize them means risking that a competitor will — gaining a decisive advantage in the process.
And suddenly, you've acquired several companies in a short period — and once again face the same question: When does integration begin?
Do you have to choose? Plague or cholera?
The situation is clear: the first integration is already underway, and another target is being added. There are two basic options: either the new company is integrated directly into the ongoing process, or the initial integration is completed first while the new target remains on hold until it is incorporated in a second phase.
So far, so difficult. Parallel integration speeds up the process but risks compromising its stability.
Corporate culture, for example, can be a critical factor. Even with the first acquisition, there were significant differences from the buyer: We’re on a first-name basis versus We’re not. Now, a third player enters the mix — with a completely different culture. This new addition prioritizes clear responsibilities and hierarchies, regardless of how people address each other.
In the original integration, cultural differences were still manageable — they existed along a single dimension. But with the addition of another company, complexity increases: Who represents which culture? And in which direction should the entire organization evolve?
Choosing stability by postponing the second integration means also losing valuable opportunities.
Take IT, for example. As part of the integration, the entire application landscape is under review. A key decision looms: selecting a Manufacturing Execution System (MES) to replace the existing production planning system. Neither the buyer’s solution nor the first target’s system is ideal, but a choice must be made for integration to move forward. The decision falls in favor of the buyer’s system.
However, the second target successfully implemented an integrated MES just a year ago. They have valuable operational experience, identified optimizations, and documented everything thoroughly — after all, they’re the ones with clear structures and hierarchies.
Had this expertise been incorporated early on, the system could have been further improved and developed into the best possible solution. But with a sequential approach, the buyer’s suboptimal system is chosen simply because time and money have already been invested in its migration. Making changes now seems unrealistic.
More stability — at the cost of speed and quality.
The choice between parallel integration — offering speed and flexibility at the expense of stability — and sequential integration is anything but trivial. And even after a decision is made, integration remains a balancing act.
Parallelize with a Playbook
A classic buy-&-build strategy simplifies decision-making. A solid platform company with stable, efficient processes serves as the foundation for consolidating a highly fragmented market by acquiring significantly smaller companies. The platform company’s target operating model is simply adopted as the standard.
With a well-defined playbook outlining each step of the integration, multiple targets can be integrated in parallel—without unnecessary risks. Processes can also start at different times. Such a playbook details the objectives and the required measures, structured by topic or function.
Careful preparation or documented experience from previous integrations helps establish realistic time frames, dependencies, priorities, and milestones. These milestones — which can also serve as internal communication tools or mark key events — might include a completed rebranding, the start of production, or the acquisition of new customers.
One of my favorite examples is Mister Car Wash, a U.S. chain of conveyor car washes. Mister — as the company affectionately calls itself — expands almost exclusively by acquiring individual locations or small chains. Each integration follows a standardized playbook, covering everything from site conversions to employee training in the company’s own academy.
Similar playbooks are common in hotel (re)openings. In addition to the playbook itself, specialized (re)opening teams often assist local staff during the initial phase. Their support spans both content — since they know the target vision and playbook inside out — and operational aspects, providing extra hands to tackle unexpected challenges.
A clearly structured roadmap creates space to accommodate the unique aspects of each acquisition. There are always valuable best practices that can be adopted across the group, which are then rolled out and incorporated into the playbook.
Because playbooks are not set in stone. They are regularly updated — not completely overhauled, but continuously refined with lessons from the latest integration processes.
Without a playbook - just listen
What about the other end of the M&A scale? When there’s neither a playbook nor extensive post merger integration experience? When the target picture for the new organization isn’t defined from the outset but instead develops throughout the process? Can another acquisition still be meaningfully involved in an ongoing integration?
Of course. After all, regular status or steering committee meetings provide a forum for discussing integration progress with key stakeholders. These meetings determine whether the future will follow the yellow or green variant. Representatives from the new acquisition should be involved early on — they, too, are relevant stakeholders.
Decisions already made regarding the target vision don’t need to be immediately applied to the new acquisition; that can happen in a second phase. However, their input can be incorporated early, offering two key advantages.
First, the new target feels included from the very beginning. Its expertise and experience contribute to the process rather than being overlooked. At the same time, it gains direct insight into the organization’s direction, ensuring transparency in the integration process.
Second, valuable insights from the new acquisition aren’t lost. Returning to the earlier example of selecting a Manufacturing Execution System (MES). Instead of being limited to two suboptimal options, the new target may introduce a superior solution — one that can be incorporated into the future IT landscape.
This approach may even unlock additional internal resources. Instead of relying on costly interim managers, underutilized talent from the new target can support the integration. This not only reduces costs but also creates direct points of contact, helping the organizations grow together more effectively.
There is always a Day One
Even if the real integration of a new acquisition is postponed, Day One still happens. It marks the day after closing when the buyer takes full control of the company. On this day, employees expect a warm welcome, an inspiring speech from the CEO, and clear guidance. (I shared my experiences and thoughts on this in my last article.)
Whether the new company is integrated immediately or later, this milestone cannot be overlooked or handled half-heartedly. It deserves the same careful preparation and serious execution as any other key moment in the integration process.
The solution? Almost doesn’t matter
As is often the case in life, there is no perfect solution — especially when evaluations must be made in advance. However, the two extreme cases outlined here provide guidance and reference points for your own very specific situation.
Many roads lead to Rome — and to a successfully integrated organization. More important than choosing the perfect approach is making a clear decision and following through consistently. After all, postponing integration until the day after tomorrow means losing valuable time.
As long as the new acquisition isn’t treated as second-class, employees are informed transparently and authentically, and they are involved as much as circumstances allow — everything will work out.
And if it is not yet good, then the integration is not yet over.
