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The Importance of M&A HR Due Diligence

Mergers and acquisitions (M&As) continue to be an essential part of today’s business landscape. Despite unpredictable economic conditions, many leaders view M&A pursuits as critical to their business growth strategies. At the same time, it is no secret, and supported by decades of research, that most deals fail to realize their projected value due to poor integration of human capital elements and lack of HR’s involvement early enough in the deal process to effectively identify, prepare for, and respond to human capital risks.

At Centri, we believe that the human resources dimension of M&As should be accorded the same emphasis and attention given to financial, legal, operational, and strategic concerns. The key to countering merger challenges is to manage the human processes effectively – before the sale, as the companies combine, and in the aftermath. Centri’s HR Advisory experts work as part of your broader M&A due diligence support team to assess and identify human capital risks that can impact valuation, integration planning, and ultimately, deal-value capture.

Our HR due diligence assessment includes the systematic collection and analysis of data regarding HR practices and programs, critical talent, and culture alignment revealing insights into target fit, cost, deal feasibility, and post-transaction integration planning. This work takes place at the intersection of people and the deal strategy. We can take the lead or supplement your M&A team.

We provide M&A HR due diligence and integration guidance in the following areas:

• HR practices, programs, policies, and plans
• Identification of talent needs, assets, and key personnel retention risks to ensure short-term integration and long-term transaction success
• Organizational culture assessment and alignment
• Leadership team assessment
• Redesign of HR operations/service delivery model
• Payroll/HRIS/HCM technology integration/harmonization
• Workforce communications and change management support
• Integration/Post-Deal performance tracking

M&A HR due diligence is no longer a ‘nice-to-have’. Talent, culture, and leadership have been and continue to be the drivers of investment thesis realization. The value chain is simple – Profitability is about performance, and performance is about people. HR due diligence is a critical and necessary component of the overall due diligence exercise. Let Centri’s HR Advisory professionals support your M&A transactions. Contact us to learn more.

Maxwell B. Heller

Managing Director | M&A Advisory Practice Leader

Max is a Managing Director at Centri Business Consulting and the leader of the firm’s M&A Advisory Practice. He has more than 20 years of merger and acquisition consulting experience and provides M&A advisory services to private equity firms, venture capital firms, family offices, and strategic/corporate clients. View Maxwell B. Heller's Full Bio

Michael Warech

Managing Director | Human Resources Advisory Practice Leader | Ph.D.

Michael is a Managing Director at Centri Business Consulting and is the leader of the firm’s Human Resources Advisory Practice. He has more than 30 years of experience designing, developing, and implementing data-driven human capital solutions that demonstrably impact an organization’s bottom line. View Michael Warech's Full Bio