From Discovery to Evaluation

Managing the Complex Merger Integration Process

When it comes to sales and acquisitions in the business world, there are few times when it is beneficial to go it alone. Without the assistance of a trained professional, by your side, you could easily lose out on opportunities that could otherwise benefit you, your business, and your community.

In the credit union industry, this statement couldn’t hold more truth. In fact, strategic mergers are often the best ways for credit unions to ensure positive, long-term growth. No matter which side of the merger you’re on, however, it’s in your best interest to seek the guidance of a skilled merger partner who can help you navigate the four phases of a successful credit union.

1. Discovery & Evaluation

Any successful merger integration involves a good amount of research upfront. The first phase is exploratory, allowing each organization to learn more about the culture, mission, values, beliefs, and goals of its potential merger partner.Free White Paper

There is no commitment at this level; leaders from the two CUs simply meet, get to know each other, and determine if their organizations might be a good fit for a merger going forward.

At this early stage, the conversations are more like a courtship, serving as a channel through which leadership can ask questions and begin to form a picture of what the future might look like if their entities should merge together.

The discovery conversations usually involve topics such as the following:

  • Economies of scale
  • Success through future strength
  • Products and services
  • Allocation of expenditures
  • Leadership (CEO, board members, C-Suite execs)
  • Branding
  • Retention and severance package possibilities

These conversations are documented in a Shared Understanding Document, which is updated throughout the discovery phase. A merger integration advisor can help you facilitate these discussions to ensure everyone’s points are heard, addressed, and documented accordingly.

2. Due Diligence

The due diligence phase begins after leaders sign the letter of intent, which is produced at the end of the discovery phase.

Due diligence deepens the discovery process, bringing documents from both organizations together so leaders can review all relevant areas of operation and identify potential risks within either credit union, should a merger ensue.

This phase often focuses on analyses department- or subject-specific parts of each CU, such as the following:

  • Financial
  • Legal
  • Member
  • Human resources
  • IT Systems
  • Valuation

Members and employees are notably at the top of the list of concerns for many CUs going through merger integration. An experienced advisor can help ensure your internal and external customers are taken care of.

Click Here to Download White Paper “From Discovery to Integration”

3. Communication & Approvals

This is a critical step, integrating the visions and ideas of both entities’ leaders to ensure the employees, members, community, and credit union brand retain value and importance in the eyes of the respective stakeholders.

Communication is absolutely essential at this phase, as neigh votes from members could stop the merger in its tracks.

4. Integration

The merger integration phase is the “nuts and bolts” part of the process. This is when two become one, delving into the final details that will spell out the future success of the brand. Contracts are finalized, and every department receives a transition plan.

Credit union merger integration is far from a simple process. The last thing you want to do is find yourself deep in the thick of things without the guidance of a skilled merger partner.

At CEO Advisory, we believe that arming our clients with as much knowledge and information during the decision process can only benefit everyone in the long run. We invite you to download our free whitepaper From Discovery to Integration: How to Manage a successful Credit Union Merger.