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Chapter 3.7 | Financial Tracking

Financial tracking is central to the realization or capturing of synergies during the post-merger integration stage of a deal. Synergies may be tracked on two different bases – depending on the nature of the synergy in question. Strategic synergies are centered around holistic areas such as culture and corporate structure, etc. Operational synergies, on the other hand, are those associated with cost savings and revenue enhancements. Regardless of the nature of synergies, they should be tracked as a cycle of actions – for instance, if it becomes apparent that synergies are not being realized as planned a number of adjustments may be required to an integration plan.

Midaxo Synergies

The following synergies may have been identified in the earlier stages of a deal and therefore require tracking:

  • Revenue increases - these can be achieved via selling a greater quantity of goods and services via broader distribution channels (including new geographies);
  • Cost rationalization – the new organization may streamline its variable and fixed cost base – such as via removing duplicate office functions and surplus employees;
  • Process optimization – this can be achieved by implementing more efficient marketing tactics and strategies, re-branding exercises, adopting innovative technologies and utilizing more efficient distribution channels;
  • Financial rationalization – a larger, new organization may benefit from a lower cost of capital, tax benefits and higher debt capacity, etc.