Over the past two decades, the path from signing to closing an M&A deal has slowed. The median lag has stretched to about 6.4 months—a 25 percent increase compared with about 20 years ago. Nearly one in six transactions today requires over a year to close (compared with one in 20 in the early 2000s). Longer “sign to close” periods, often due to regulatory scrutiny, create more uncertainty, make it harder to retain talent, and slow momentum. Perhaps most important, long gaps complicate synergy capture, which can threaten deal value.
In this environment, clean teams—once considered a “nice to have” during integration—have become a necessity in many deals. In the past, clean teams were used primarily during due diligence to enable acquirers and targets to safely analyze competitively sensitive data and make decisions relating to valuation, terms, or whether to do the deal at all. Today, companies involved in M&A continue to use clean teams for due diligence, but they also use them to start critical synergy planning months ahead of deal close. Clean teams can help buyers and sellers prevent value leakage, prepare for day one readiness, and preserve momentum when it matters most (see sidebar, “What is a clean team? A refresher course”).
This article describes how M&A has changed in recent years and why clean teams have become more important. We share examples of companies that have used them successfully and review what clean teams do and how their role has evolved in the new M&A landscape. Finally, we distill the five best practices for making clean teams a source of accelerated value creation.
Longer delays between deal signing and closing
In most public M&A transactions, there is a gap between when a deal is signed and announced and when it can close. After signing, shareholders from both companies must approve the combination, and relevant regulatory authorities are given the opportunity to review the transaction for potential antitrust concerns. This gap, to be sure, is nothing new. But over the past two decades, the time between signing and closing has grown significantly (exhibit).
McKinsey’s research suggests regulatory scrutiny is a primary cause of the growing lag across industries and geographies. Lengthy regulatory reviews in the United States and Europe, for example, increased by 50 percent between 2017 and 2022.
Broadcom’s acquisition of VMware is a prime example of a significant regulatory delay. The deal, announced in May 2022,1 faced intense examination in multiple jurisdictions, including China, the European Union, and the United States, due to concerns over competition in software and chip markets. Regulators ultimately approved the transaction, which closed in November 2023 after a roughly 18-month delay.2
Going beyond due diligence
Today, amid extended deal timelines, clean teams have shifted from being optional—and often diligence focused—to being essential. Acquirers continue to utilize clean teams to analyze competitively sensitive data during due diligence to make more informed decisions about a potential acquisition’s value, risks, and opportunities. Increasingly, however, they find ways to use this data to uncover synergies, mitigate risks, ensure day one readiness, and accelerate integration.
A clean team is “enabling us to quickly exceed our total savings targets,” said one integration leader.
An integration leader at a global packaging company in the midst of a merger with a complementary, cross-border player described how a clean team helped enable synergies. “Comprehensive and fast data collection, early stakeholder engagement, and detailed negotiation planning are enabling us to quickly exceed our total savings targets,” the leader said.
The following two cases illustrate examples of how clean teams not only safeguard information but also enable better outcomes.
Utilizing a clean team resulted in a successful day one
An application software company acquired a complementary player and announced a $100 million growth synergy target for the subsequent 12 months. The acquirer and the target worked together within the structure of a clean team for three months between signing and close to develop a detailed cross-sell plan. The clean team identified specific target customers, crafted a joint value proposition, and prepared sales representatives with training and day one sales packages (including rules of engagement, joint value propositions, and other customer communications guidelines). On the day of closing, the newly combined sales organization launched its comprehensive cross-sell campaign, generating value almost immediately.
Had the companies waited until close to begin planning, synergy realization would have likely been delayed by at least three months, potentially costing the combined company millions of dollars in year-one value. Instead, the clean team allowed the new entity to get off to a running start.
A clean team enabled preclose planning
Two distribution companies merged, and their more than 2,000 overlapping accounts comprised over 15 percent of their combined revenue. If the merged entity were to experience substantial customer attrition, the entire value of the transaction could have been wiped out.
The clean team helped the companies avert this possibility. Operating under strict legal compliance and using advanced analytics, the team matched customers, resolved issues relating to sales rep assignments, and designed new sales territories before the merger closed. This preclose planning allowed for smooth customer migration on day one and led to nearly 100 percent retention of the combined customer base.
Without a clean team, planning could not have been done until the transaction officially closed. The companies would have likely faced delays in resolving account overlaps and sales rep assignments, leading to confusion and dissatisfaction among internal teams and customers. The lack of preclose planning could have exacerbated revenue risks because the companies would have been unable to address pricing, discounting, and terms-and-conditions differences in a timely manner.
Clean teams can translate data findings into concrete integration actions
The following are some of the major areas that clean teams scrutinize and the steps they take to accelerate integration before the deal closes:
- Revenue
- Assess customer overlap to identify cross-sell opportunities and mitigate risk
- Streamline pricing and margins on exchangeable products to simplify offerings
- Harmonize loyalty programs to strengthen retention
- Transition and rightsize the selling organization to fit the combined company
- Manufacturing
- Optimize production allocation by analyzing cost positions and utilization
- Review fixed and closure costs to potentially restructure sites
- Explore raw material substitution by assessing suppliers and costs
- Procurement
- Review supplier lists, terms, and product-level prices to identify potential synergies
- Renegotiate or safeguard long-term supply contracts to balance value with continuity risk
- Analyze freight routes and rates, aiming to maximize transportation synergies
- Seek opportunities to reduce working capital
- Research and development
- To identify overlaps and synergies, standardize R&D project summaries to ensure an apples-to-apples comparison
- Evaluate large, near-term projects for strategic alignment with the new entity
- Assess organizational setups to inform consolidation opportunities
Guidelines for setting up clean teams
Clean teams are evolving as regulations, data privacy, and technology advance. Increasingly, artificial intelligence and automated data redaction can streamline clean-team analysis while reducing compliance risks. In heavily regulated or cross-border deals, clean teams are likely to expand their scope beyond competitive data to include personal and customer data, merging privacy compliance with integration planning.
As clean teams become increasingly critical to accelerate value capture and prevent value leakage, dealmakers have the opportunity to apply the following five best practices.
Review deal rationale and decide where a clean team can create the most value
In any M&A transaction, the strategic rationale of the deal should guide integration planning. This ensures that integration efforts are aligned with strategic objectives, tailored to the unique aspects of the deal, and focused on value creation. Clean teams are no different: The deal rationale should guide when and where clean teams should be used. If the deal rationale is predicated on substantial cost takeout or cross-sell, a clean team could be highly accretive. However, if the deal is intended to strengthen the talent and capabilities of the acquirer, or allow the acquirer to enter a new geography, a clean team may not be necessary.
For example, an industrial player expanding into a new geography through M&A considered using a clean team. A clean team could have accelerated certain aspects of preclose integration planning, including reviewing confidential supplier contracts to pinpoint potential scale leverage savings. But the primary objective of the transaction was to grow by establishing a foothold in a new, fast-growing market and gaining access to new customers. With limited cost synergy potential, the company concluded that the benefits of deploying a clean team were not worth the effort and risk.
Jointly develop a robust clean-team agreement, establish clear guidelines, and ensure strong process management
The clean-team agreement ensures a mutual understanding of what information can be shared, who can access it, and how it will be used and stored. This clarity helps prevent disputes, data leaks, or misunderstandings that could delay or derail the transaction. Further, deep collaboration on the details signals good faith, fostering trust between the parties. It also reassures regulators, board members, and stakeholders that the deal is being managed responsibly.
When possible, staff clean teams with personnel from both the acquiring and target companies, along with external consultants
Internal employees bring institutional knowledge that external advisers often lack. They understand, in nuanced detail, the company’s products, processes, people, pricing structures, and systems, enabling more efficient and effective analyses and planning. Internal employees, including sales leaders, product managers, and financial planning and analysis (FP&A) heads, often have better insight into overlapping processes, can spot operational risks earlier, and can interpret sensitive data within the right business context.
However, if a proposed acquisition falls through, the situation for employees who were part of the clean team is governed by the agreements established beforehand and may also be subject to general employment laws. For example, employees who accessed competitively sensitive information while working on the clean team might be temporarily restricted from working in areas that directly compete with the counterparty or may be subject to other restrictions for a certain period. As such, decisions regarding which employees to staff to a clean team must be made thoughtfully and with contingency plans (for example, some clean-team members could take on new roles within the organization) should the deal fall through.
Rigorously deprioritize work that does not have to go through a clean team
While clean teams enable faster integration planning by allowing access to otherwise restricted data, working outside a clean team is more efficient. Any analysis and resulting findings developed within a clean team must typically be sanitized, aggregated, and evaluated by each party’s legal counsel before it can be released to a joint steering committee. This process may require multiple iterations and take considerable time. Thus, it’s critical to weigh the incremental impact of receiving sensitive data against the ease and efficiency of analysis.
For instance, assessing general and administrative (G&A) synergies outside of a clean team lets dealmakers directly access data and involve key experts—like the buyer’s head of FP&A—without clean-team restrictions. This approach could limit access to competitively sensitive information, but such a level of granularity might not be required. In contrast, analyzing G&A synergies within a clean team could enable a more comprehensive assessment. However, because clean-team protocols require data sanitization, aggregation, and legal review, the process can be slow. Further, experts’ clean-team involvement may limit their ability to support other aspects of the transaction.
Recognize that it’s not just about numbers but also about preparing for action
Analyzing sensitive data through a clean team can often provide a higher level of fidelity than what might otherwise be available. However, the true advantage of utilizing clean teams during preclose integration planning is that it allows dealmakers to “hit the ground running” with value capture and other integration execution activities on day one. Speed is critical in synergy capture: A deal is 2.6 times more likely to succeed (and deliver 40 percent more total returns to shareholders) if synergy targets are met within the first two years postclose (as opposed to taking more than four years). Integration leaders can therefore guide their teams to use the clean team’s data and insights to better prepare for postclose activities, rather than focusing narrowly on improving synergy or cost estimates.
As deal timelines lengthen, the ability to capture value quickly has never been more important. Clean teams, once a tactical option to improve due diligence, are more often a strategic necessity that accelerates value capture; by supporting integration planning, they can ensure day one success. For leaders navigating today’s complex M&A landscape, investing in robust clean-team practices is one of the most effective ways to maximize deal outcomes.
