navigating mergers, acquisitions, and divestments: your IT roadmap

After a slow 2023 and 2024, the M&A market is heating up in 2025, with global deal values reaching $2 trillion in the first half alone, driven by a wave of megadeals and strategic consolidation. At the same time, over 80% of industry leaders predict an increase in corporate divestments, with 70% divesting to refocus on core operations.

But here's the thing: while executives focus on financial synergies and market positioning, IT integration presents unique challenges that require careful planning in any merger or acquisition. The good news? With the right approach to IT infrastructure decisions, you can unlock significant value and set your combined organization up for success.

The real cost of IT complexity in M&A

When two companies merge, IT complexity doesn't just double, it multiplies. You're suddenly dealing with incompatible systems, overlapping application landscapes, conflicting security protocols, and data scattered across multiple platforms. About one-third of carve-out deals fail to deliver their initially expected value, largely because companies underestimate operational challenges.

Companies can expect extended sign-to-close timelines, one-time costs requiring budget flexibility, and integration work that unfolds over months rather than weeks. And in today's market, where AI investments demand careful capital planning, effective IT integration ensures you invest resources strategically and build a foundation for future innovation.

what to watch for: pre-deal IT due diligence

IT due diligence is your opportunity to uncover hidden risks before they become expensive problems.

Here's what demands your attention during the evaluation phase:

• Infrastructure assessment: Start by mapping the target company's entire IT infrastructure. What systems are they running? How old is the technology? Can their architecture handle increased workloads post-acquisition, or will you need immediate upgrades? Legacy systems might look functional on the surface, but outdated code and redundant software can inflate your costs significantly.

• Application portfolio analysis: Companies often use different software platforms that don't play nicely together. Document every application, identify overlaps with your existing systems, and assess integration complexity. Which systems can be retired? Which need middleware solutions? Where will you need complete consolidation?

• Cybersecurity evaluation: Systems with varying security protections expose vulnerabilities during integration. Review their security protocols, compliance certifications, incident history, and data protection measures. Remember: when systems merge, your security is only as strong as the weakest link.

• Technical debt documentation: Technical debt is the silent deal killer. Evaluate code quality, system maintenance backlogs, pending upgrades, and infrastructure modernization needs. This hidden liability can dramatically impact your integration timeline and budget.

• Vendor and license review: Scrutinize all managed service provider contracts, hosting agreements, software licenses, and support contracts. This is where you'll find opportunities to consolidate services and negotiate better terms, but also where you might discover locked-in commitments that limit your flexibility

the standardization imperative

M&A integration strategies can fall short if they focus on connecting systems rather than standardizing them. Standardized IT systems deliver measurable benefits that directly impact your bottom line.

First, operational efficiency. When everyone uses the same platforms with consistent processes, productivity increases and the administrative burden decreases. You're not maintaining multiple systems or training staff on redundant tools.  

Second, cybersecurity becomes manageable. Standardized systems are significantly easier to monitor and protect because your security efforts focus on a single system rather than scatteri across multiple platforms. With cyber threats growing more sophisticated, this consolidation advantage is critical.  

Third, you reduce downtime and complexity. Fewer systems mean fewer points of failure, simpler troubleshooting, and faster problem resolution. Your IT team spends less time juggling incompatible technologies and more time driving innovation.  

Finally, standardization creates centralized administrative controls. You gain unified visibility across your entire IT landscape, enabling better governance, compliance management, and strategic decision-making.  

For large organizations managing increased scale and complexity post-merger, standardization is an absolute strategic necessity. We know these challenges can be complicated to navigate, but after guiding many clients through the same journey, we've learned the ins and outs of overcoming them. We're here to put that experience to work for you.

integration: where strategy meets reality

Even with perfect due diligence, post-merger IT integration presents real challenges. System compatibility issues top the list, ensuring different infrastructures, applications, and platforms work together requires careful planning and often substantial investment.  

Data consolidation represents one of post-merger integration's most valuable opportunities. Merging large organizations creates an expanded data pool that can drive significant business value, particularly as AI adoption accelerates. The future potential of transforming business processes through AI depends on unlocking the power of your data, and a successful merger multiplies that potential.

However, realizing this value requires careful execution. You're consolidating information from systems with different data structures and formats while maintaining data quality, consistency, and security. The technical complexity is substantial, but the payoff, a unified data environment that enables advanced analytics, AI-powered insights, and more informed decision-making, makes the investment worthwhile. When done right, data integration doesn't just prevent disruptions, it positions the combined organization to monetize its expanded data assets and accelerate digital transformation initiatives.

Then, there's the cultural dimension that technology leaders often underestimate. IT teams bring their own practices, preferences, and priorities. Creating unified standards of operation requires managing resistance to change and aligning diverse workflows. Technology decisions alone won't drive successful integration: you need change management strategies that bring people along.  

A phased integration approach minimizes disruption. Start with comprehensive system mapping and compatibility testing. Prioritize which systems to consolidate first based on business criticality and integration complexity. Implement robust data migration protocols with extensive validation. Update and standardize cybersecurity measures across the combined environment and maintain business continuity by keeping fallback plans and support resources ready.

the carve-out challenge

Divestments and carve-outs present IT complexities that deserve special attention. When you're separating a business unit, you must operationally untangle people, processes, systems, facilities, contracts, and intellectual property. IT infrastructure and shared services are almost always highly complex and problematic in these situations, and as in a merger or acquistion, being realistic about timelines and managing expectations is primordial.

The carved-out entity needs standalone IT capabilities from day one. This means replicating infrastructure, extracting and migrating data, establishing new vendor relationships, setting up independent security protocols, and ensuring operational continuity. All while the parent organization continues running its remaining operations without disruption.

Transition Service Agreements (TSAs) can provide breathing room, allowing the divested business to use parent company systems while building its own capabilities temporarily. However, TSAs require careful planning around scope, duration, pricing, and exit milestones. The goal is smooth separation, not prolonged dependency.

common pitfalls to avoid

Learning from others' mistakes is cheaper than making your own. Don't rush integration without proper compatibility testing: the pressure to show quick wins can lead to hasty decisions that create bigger problems down the road.  

Underestimating one-time costs is remarkably common. Budget realistically for system consolidation, data migration, interim redundancy, and unexpected complications. Build in contingency for the things you can't predict.  

Inadequate attention to talent retention can also derail your entire integration. Key IT personnel understand the systems you're inheriting. Losing them means losing critical institutional knowledge precisely when you need it most.

And finally, treating integration as purely a technical exercise ignores the organizational change dimension. Cultural alignment, clear communication, and stakeholder engagement are integration fundamentals.

looking ahead: technology trends reshaping M&A

AI investments are fundamentally changing capital allocation decisions, with tech companies collectively spending hundreds of billions on AI infrastructure. This creates both risk (acquiring businesses on the brink of AI disruption) and opportunity (harnessing new technologies for competitive advantage).

Cloud strategies require fresh evaluation post-merger. While cloud-based solutions often made perfect sense for individual organizations, particularly when the scale didn't justify on-premises infrastructure, mergers fundamentally change this calculus. The combined scope means reconsidering IT consumption models entirely: workloads that were cost-effective in the cloud at smaller scale may warrant on-premises infrastructure when organizations join forces. This shift requires strategic reassessment of which services stay cloud-based and which benefit from consolidated, self-managed infrastructure.

Cybersecurity acquisitions remain strategic priorities amid proliferating digital threats. And the emphasis on ESG factors is influencing deal selection and integration priorities.

For organizations navigating M&A in this environment, proactive IT planning is key as complexity will only increase, integration timelines will remain tight and the margin for error will continue shrinking.

the path forward

Whether you're pursuing growth through acquisition, divesting non-core assets, or managing complex carve-outs, your IT strategy will ultimately determine your success.

This is where our experience can become your competitive advantage: as specialists in IT standardization for large multinational organizations, we understand that successful M&A outcomes require more than just technical know-how; they demand a partner who can handle the complete spectrum of challenges.

From comprehensive due diligence assessments and phased integration strategies to global deployment capabilities spanning every corner of the world, we serve as your single point of contact throughout the entire journey. Our approach encompasses the full IT lifecycle: centralized procurement, professional provisioning services, infrastructure maintenance, and responsible decommissioning through our BBaaS® program that meets both environmental and compliance standards.

We don't just connect systems: we build unified, scalable IT environments that reduce complexity, strengthen security, and position your newly combined or separated organization for sustainable growth.

Ready to optimize your M&A IT strategy? Contact Exellyn today to discuss how our standardization expertise and global capabilities can help you in your M&A journey.