A General Counsel’s Tips for Integrating Post-Merger
In 2017, Mid-America Apartment Communities Executive Vice President and General Counsel Rob Del Priore was tasked with leading the post-merger integration of his company and Post Properties, Inc. The merger made Memphis-based Mid-America the largest publicly-traded apartment real estate investment trust in the US, with an ownership interest in over 100,000 apartment homes in 17 states. In addition to the various legal issues involved in the merger, Del Priore considered the integration of the two companies’ people very carefully. In order for the merger to be truly successful and the transition to go smoothly, Del Priore knew he needed buy-in from nearly everyone. To get that support and effectively integrate the two teams, he focused on three things – communication, planning and follow through.
“Communication is at the top of the list,” Del Priore said. “It’s critical to encourage candid and open communication between both parties from the beginning of the merger.”
He emphasizes the importance of developing trust – cultivating an environment for open dialogue between the management teams of the combining companies.
“Obviously, when you start out there are issues in play relating to the purchase agreement itself, but once negotiations are complete it becomes more about team building and determining how to efficiently and effectively integrate the new team.”
As an example, he notes that once you get to the point where you’re deciding who should stay and who should go, having those candid relationships that allow for an open and honest dialog is crucial.
“When you’re meeting someone, and you spend 10 or 15minutes with them, it’s impossible to really truly evaluate them as well as someone who has worked with them for 10 years or 15 years,” he said.
Planning might seem like an obvious area to focus on but Del Priore said he can’t stress enough how important it is to be operationally prepared when the merger closes.
“We had a cross functional team to sit down and determine what are the most important things that we need to focus on,” he said. “This exercise included identifying risk areas – legal, business and regulatory – and developing a detailed plan and timeline to address every concern.”
He notes that it was an intense exercise in project management – having the management team prepared to respond at 12:01 a.m. on Day 1 of the new company. This includes details within details that a GC might not think of. In the case of Mid-America, not only did the company website need to be up and running, but there were a number of sub-sites vital to the company’s leasing business that had to be ready.
“From the outside world’s point of view, it needed to be seamless,” he added.
Finally, Del Priore believes that one of the most important goals in an acquisition is to retain valuable employees. That’s why he urges GCs to commit to following through on all the plans to fully integrate the new team even after the dust settles. Again, this might seem like an obvious step, but Del Priore noted that to get it right typically requires a long-term commitment, effort made over months and sometimes longer.
“The risk in a transaction if you don’t nurture the legacy company’s employees is that they will ultimately go elsewhere. They have to know that they’re valued and that the new company offers great opportunities for them moving forward,” he said. “It’s not complicated - a lot of it is talking to people and getting the pulse of the organization and understanding the disruption that people feel when they’ve joined a new company– really bringing them into the fold.”