COMPANY CONFIDENTIAL Corporate Development Acquisition Integration Playbook
C O R P O R AT E D E V E L O P M E N T
Acquisition Integration Playbook
Nordson Corporation28601 Clemens Rd
Westlake, OH 44145Phone 440.892.1580 • Fax 440.414.5751
Revision: 0616.2
Table of ContentsOverview.....................................................................................................1Guiding Principles.......................................................................................2
Guiding Principle - #1 Simplicity/Alignment................................................2Guiding Principle - #2 Communication.......................................................2Guiding Principle - #3 Operational Effectiveness.......................................2Guiding Principle - #4 Measurement and Feedback..................................3
Structure.....................................................................................................5Organization Structure...............................................................................5The Steering Committee............................................................................5Acquisition Integration Team......................................................................6
Commercial Integration Lead.................................................................................6
M&A Integration Manager......................................................................................6
Functional Integration Team..................................................................................7
Cross-Functional Sub-Teams................................................................................8
Governance................................................................................................8Process.......................................................................................................9
Integration Strategy and Planning..............................................................9Integration Pre-Planning/ Draft Plan of Intent..........................................12Integration Planning.................................................................................20Execution: Integration Management during Stabilization (100 Days)......23
Communication.........................................................................................26Assessment..............................................................................................26Appendix A. Summary of Acquisition/Integration Process...........................31Appendix B. Integration Communications....................................................32Appendix C. Action Plans.............................................................................35Appendix D. Functional Action Plan.............................................................39
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OverviewIntegration Playbook – Nordson Corporation
This integration playbook is the first attempt at creating a formal documented corporate integration process at Nordson Corporation. It is now, and should continue to be a dynamic set of documents and tools. Every acquisition is different, as are the people who will be using the data, and the environment in which it is operating. Use this tool as a guide and a roadmap. Add to it, simplify it, and adapt the tools and methods for the specific acquisition integration.
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Guiding PrinciplesWe will adhere to the following principles:
Guiding Principle - #1 Simplicity/Alignment Mergers and Acquisitions integrations are complex business activities. At Nordson Corporation, we understand that every acquisition is different, some more complicated than others, but we do not want to add complexity to the process. This is the reason that we focus on alignment. If we set common standards, all of our internal departments and integration activities will align to achieve the business goals of the acquisition.
We strive for simplicity in data capture, check lists, and reporting devices, especially in the first 100 days after closing. Finding ways to use new technology to move along the integration is encouraged and this playbook will change as we improve upon our processes. The Corporate Development group will continually update our playbook and incorporate improvements as we gain experience.
Guiding Principle - #2 CommunicationCommunication refers to the messages that are shared with all of the stakeholders in the corporate integration process. Stakeholders include internal entities such as the Nordson Board of Directors, the senior management team, and employees of Nordson and the acquired entity. External stakeholders include the two companies’ shareholders and customers. Consistent and coordinated messages and themes of communications will add clarity and confidence as the integration activities progress.
“Be assured that whenever there is an information vacuum or partial information vacuum, the human species can be counted on to fill that vacuum with its own fantasies about what is ‘probably’ going on,” states Mark Brenner, PhD, chairman of the Global Consulting Partnership. “Most employees are constantly talking about all the ‘worst-case scenarios,’ in terms of who will be retained, who will be released, and how the everyday rules of the game will change, once the dominant culture shifts into ascendancy.” For all of these reasons, a clear vision and consistent communication are vital.
Guiding Principle - #3 Operational EffectivenessStrive for an efficient and effective integration process and continuously improve integration capabilities by:
Promoting consistent, repeatable processes that reduce integration project setup time and assist with resource and capacity planning.
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Adapting standards to accommodate different business models as Nordson acquires large or small companies, and those offering different types of products and services.
Incorporating the lessons learned after each acquisition and associated integration.
Guiding Principle - #4 Measurement and FeedbackActively measuring our performance during an integration process is crucial to driving performance excellence in our acquisition process. In addition to integration progress and synergy tracking measurement tools, we will also identify measures that focus on identifying and tracking the people issues as well. For example, effective communicating with employees throughout the integration process can be measured by employee surveys. The following metrics are commonly tracked by companies to measure deal success:
Employee engagement Revenue growth Talent Acquisition/retention Operational continuity Employee productivity Margin gain
We will build in feedback loops to track our progress, and continually measure performance against expectations, while documenting and rewarding our successes. Validating improvements and judging success is not something done at the end of the integration process, accompanied by a declaration of success; rather, it requires an ongoing process designed to provide the integration team members with real-time feedback. Feedback can be used to enhance and strengthen strategies that prove to be successful in creating a shared corporate culture. We can also use feedback and measurements to modify or replace strategies that are not gaining traction.
Our goal is to be flexible enough in our operations during integration, to make changes when necessary and alter the playbook as we learn through experience.
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Exhibit 1-Integration Process Begins At Due Diligence1
1 Note: The full acquisition/integration process can be found in Appendix A on page 29.
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Final Approval & signing
Announce to close
Integration/ Stabilization100 days
Integration Optimization100+ days
Integration Management
PREACQUISITION
Draft Plan of Intent Approved Plan of Record
Due Diligence
Business Strategy
OrgStructure
Cost and Synergies
High Level Project /Scope Plan
High Level Day 1 Plan
Disc
over
y an
d Du
e Di
ligen
ce
End
Stat
e De
finiti
on
Estab. Team & Gov.
Day 1 Plan
Detailed Project Plan
Cost and Synergies
OrgStructure
HR Work stream
Work stream
Work stream
Work stream
Work stream
BO Work stream
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StructureOrganization StructureAcquisition Integration at Nordson Corporation will use a specific organizational structure to drive the accomplishment of the project objectives. See Exhibit 2:
Exhibit 2-Steering Committee
The Steering CommitteeObjective: to oversee and guide the Integration Process
Members: BU Executive, CFO, HR Executive, Continuous Improvement Executive, Corporate Development, others as appropriate
Responsibilities:
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Steering Committee (Business Group Executive
+ Corp Dev + CI + HR)
Commercial Integration Leader
M&A Integration Manager
Operations Commercial Supply Chain
HumanResources
Back Office / Finance
Marketing Communications IS / IT
Pricing
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Provide overall vision and direction and assist with resources allocation
Monitor integration progress and adherence to the integration plan
Assist in problem areas – removing barriers, prioritization, change management
Review and approve monthly integration status report to CEO
Acquisition Integration TeamCommercial Integration Lead
Objective: Dedicated leader of the integration team. Drive the integration process, providing leadership to the integration team and the newly acquired entity.
Selection Guidelines: Senior-level manager with skills necessary to lead the company through the integration process. Since every integration process is different from the next, the selection criteria will differ by the complexity involved in the specific acquisition strategy. See “Integration Complexity Matrix” (Exhibit 8, pg. 17).
Responsibilities:
Lead the development of the integration plan and process
Assure project objectives and milestones are achieved
Deliver the integration and synergy commitments, in conjunction with the Business Group Executive
Identify and resolve issues including resource allocation
Develop and communicate regular status reports and dashboards to the steering committee and senior executives
Provide a report-out at the “end” of the integration, on all members of respective functional teams, for inclusion on annual performance reviews
M&A Integration Manager
Objective: Project Manager for the integration team. Manage the day-to-day integration process and activities.
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Selection Guidelines: Currently staffed by the permanent M&A Integration Manager within Corporate Development
Responsibilities:
Participate in the creation of the integration plan and process
Coordinate, plan and track the integration effort
Provide day-to-day support, tracking and coordination of the integration project in support of the Commercial Integration Lead
Coordinate, guide and train the functional team leads and functional team members
Monitor functional team progress and identify, to the Commercial Integration Lead, potential issues/problems
Functional Integration TeamFunctional Team Leads
Objective: To carry out the integration process
Selection Guidelines: The Functional Integration Team leads will be dedicated or partially dedicated to the integration team depending on function and complexity of the integration. They may also be the functional due diligence resource, insuring a seamless transition from transaction to integration. Functional teams may change based on the particular integration; however, the standard functions to be represented on the Acquisition Integration Team include:
Supply Chain Human Resources Back Office / Finance / Legal Marketing Communications Pricing IS/IT Operations – efficiency, footprint optimization Commercial – channel/revenue optimization
Responsibilities:
Development of functional charter, strategies, and tactics
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Creating and managing a detailed project plan for their functional team responsibilities, including functional team identification and resource allocation
Verify and further develop synergy opportunities and capture plans
Delivering the functional integration project plan and synergy capture plan
Weekly report their team’s project status to the Integration Project Manager via Smartsheet and additional reporting mechanisms as developed, as well as face to face or teleconference meetings.
Bring conflicts or irreconcilable issues to the attention of the Integration leadership for resolution
Provide a report-out at the “end” of the integration, on all members of respective functional teams, for inclusion on annual performance reviews
Cross-Functional Sub-Teams
There may be a need to create a cross-functional horizontal sub-team, for working on a task that has inter-dependencies between functional areas. Sub-team responsibilities mirror the functional team responsibilities identified above. An example of a project for a horizontal team is order management – pricing/finance/IT and commercial may all be involved in creating a workable process. It may take additional resources to solve a complicated process flow, therefore a cross-functional sub-team or task force will be created to do a deeper dive into solving a business challenge. The cross functional team will report the solution to the functional leader identified in the original integration plan.
GovernanceA formal governance structure is essential during the creation of the Project Plan and determining the structure and priorities during an integration. It is a function of best management practices to have established structure for decision management. The Integration Governance Matrix as detailed in Exhibit 3 provides the governance and decision-making hierarchy of the Nordson Integration Process.
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Exhibit 3-Integration Governance Matrix
ProcessIntegration Strategy and Planning
Overview
Each acquisition should have an individual and specific integration strategy that identifies the level of integration required to deliver value from the acquisition and is driven off of the acquisition strategy rationale. The importance of an integration strategy goes beyond the fact that the benefits from the acquisition are not created simply through the joint ownership of assets, but are dependent on how well the target can be integrated and synergies can be realized. This, in
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Initial Plan or Changes to Plan
Business Segment VP
IntegrationSteering
Committee
Commercial Integration
Lead
M&A IntegrationManager
IntegrationFunctional Lead
Functional Team and/or participants
Integration Scope Charter
A/P A P P C C
Integration Project Plan Baseline
A A P P P/C C
Integration Project Plan Baseline
Changes
A A A/P P A/P C
Communications Plan
A A A/P P P C
Synergy Capture Plan
A/P A A/P P(program level)
P(synergy initiative
level)
C
Synergy Baseline Changes
A/P A A/P P P C
Issue Resolution A A/P A/P P P C
Integration Governance Matrix
Governance Decision Authorities: P=Plan, A= Approve, C=Consult
Escalation path – Business Segment VP has final approval authority
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turn, will guide the entire integration planning process and will underpin the Integration Project Plan.
There are a few things to keep in mind as planning for the integration commences:
1. Be mindful of integration complexity - just because a company is small, doesn’t mean the integration will be simple. The Integration Complexity Matrix (Exhibit 8, pg. 17) is a good tool for understanding the complexity that will be encountered during the integration.
2. Clearly identify the appropriate level of integration at the beginning of the process.
There is no “one size fits all” solution when it comes to the degree of integration.
Identification of the level of integration needs to be early to help manage scope “creep”. Managing the “in scope vs. out of scope” is an important part of integration leadership. For guidance on integration types, see the “Standardizing Deal Types Chart” (Exhibit 4) on the following page.
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Exhibit 4-Standardizing Deal Types Chart
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Standardizing Deal Types helps to streamline, and guides focus of integration on the critical elements
Investment Thesis
Key value drivers
Level of Integration
Product tuck-in New Business New Geography,Existing geography Existing geography Conglomerate & Diversification,
Acquire R&D, technology, people1 2 3
• Fills out existing portfolio with complementary products• May also extend sales reach
• Allows entry into product category adjacency with higher margins and higher growth potential
• Allow entry into new geography with higher growth potential
• Economies of scale• Cross Selling• Possible capacity rationalization
• New value proposition• Cross transfer of skills and capabilities to drive scale• Possible cross-selling• Talent retention• Cultural adaptation
• HIGH• Generally full integration• If target provides new channels, retain sales personnel with key relationships and capabilities
• New value proposition• Cross-transfer of skills and capabilities• Talent retention: local knowledge• Cultural adaptation
• Moderate to high• Selective to full integration throughout commercial functions and enabling (back-office) functions
• Low to Moderate• Keep core functions separate (at least initially)• Selectively integrate certain enabling (back-office) functions• Consider building up certain functions into new geographic centers of excellence
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Exhibit 5-Integration Pre-Planning/Draft of Intent
Integration Pre-Planning/ Draft Plan of Intent
Overview
The integration plan is an action plan with a set timeframe that works out the mechanics of how the acquired entity will be integrated, synergies will be attained, growth will be achieved and therefore how the businesses will be combined to realize the value from the acquisition. The development of the plan begins during Due Diligence and the key priorities and organizational goals, along with the expectation of synergy capture will be developed, defined and agreed upon before the close of the deal. The functional workstreams will then be staffed and assigned to carry out the activities that will achieve the integration goals and result in a unified organization.
Action Steps During Due Diligence:
Determine level of Integration
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Integration Optimization100+ days
Integration Pre-Planning / Draft Plan of Intent
Due Diligence
High Level Day 1 Plan
End State Definition begins : Determine Level of Integration
Final Approval & Signage
• Determine level of integration
• Identify key processes for integration plan development
• Begin Cultural Assessment
• Select Commercial Integration Lead
• Identify Functional team leads
• Begin development of communication strategy
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By identifying the type of integration, we can better prepare for the appropriate level of integration and begin to identify resources during due diligence. As we become more efficient in our integration processes, we will gain the discipline and rigor for each type of acquisition, with more defined checklists and tools.
The determination of the level of integration will be done by the business unit leadership, corporate development staff and due diligence team. It is important that everyone understands and uses this as guidance throughout the integration, to avoid scope creep.
At Nordson, acquisitions generally fall into 3 main types.
1. Product Tuck-in, Existing Geography (high level of integration)
Smaller companies with innovative products often have difficulty reaching the entire potential market for their products. Nordson may purchase companies and use our own larger scale sales force to accelerate the sales of the smaller companies’ products. The target may also help accelerate Nordson Corporation revenue growth.
An example is Procter & Gamble’s acquisition of Gillette. The combined company benefited because P&G had better sales in some emerging markets, where Gillette was stronger in others. Working together, they were able to successfully introduce products into new markets much faster.
2. New Business, Existing Geography (moderate to high level integration)
A new technology or product is acquired, to put through Nordson sales channels.
This is a fairly simple and common type of merger/acquisition, and is used to obtain skills or technologies faster or at a lower cost than
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they can be built. This is often used in the high tech market space, to speed growth.
A good example is Cisco Systems, as they grew very quickly from a single product line into a major player in the Internet equipment space. From 1993 to 2001, Cisco acquired 71 companies. Cisco’s sales increased from $650 million in 1993 to $22 billion in 2001, with nearly 40% of revenue coming directly from new acquisitions.
3. New Geography, Conglomerate & Diversification, Acquire R&D, technology, people (low to moderate level integration)
This is where companies are related by markets, technology or production processes. The target firm is valued due to an extension of a product line or a similar technology market space. A product extension is when a new product line from the acquired company is added to an existing product line – gap filling with current customer markets. A market extension is when a new or adjacent market is added to the existing market, bringing new customers or deepening current customer relationships.
Identify key processes for scoping the integration priorities
As part of due diligence responsibilities, each functional leader begins to identify high-level priorities for their integration plan as documents are reviewed. Using the Functional Work Stream Integration Planning Grid (Exhibit 6, pg. 14), the Due Diligence teams begin to outline their high level priorities and the desired end-state.
In all integrations there are required integration priorities:
Human Resources – harmonizing benefits, labor contracts, general policies and more, to unite into one cohesive system
Back office – Finance, Treasury, Tax, Global Trade, and Product Compliance
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IT/IS – facilitating combination of communications systems, tools and support
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Exhibit 6-Functional Work Stream Integration Planning Grid
The priority of additional functional areas will be identified by the deal rationale and the determination of potential synergy capture and value creation. All functional areas will be identifying priorities for integration at this stage, as these priorities will drive the functional actions plans.
Begin Cultural Assessment (details in development)
Select Commercial Integration Lead
Assessing the complexity of the integration assists Nordson in identifying the best candidate for the Commercial Integration Manager, which is a key appointment for the success of the integration project. One method for identifying specific skills required is
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Functional Work Stream Integration Planning GridFunctional Area What is Critical to
Success?Degree of Integration Required to Achieve Mission Criticals
Risks of the Integration Model
Mitigation Plan
Human Resources
Operations
Supply Chain
Pricing (?)
Sales and Marketing(Commercial)
IS/IT
Back Office/ Finance
MarketingCommunications
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the ICG Grid. Using this Integration Complexity Grid (Exhibit 8, pg. 17), nine attributes of the integration are reviewed by the Business Unit VP, who is the sponsor of the acquisition. Each attribute is mapped against a standard list of integration management skills
The result of the analysis gives us a customized integration management “job description”. Commercial lead may also be determined due to geographic location, language capabilities, and/or other business needs.
Identify Functional Team Leads
Functional team leads will normally be identified during due diligence, based on business needs, resourcing and the skill set required to achieve the integration priorities that have been determined during pre-planning.
Begin Development of the Integration Communication Strategy
o Corporate Marketing Communications will lead the development of the high level plan during due diligence phase.
o Types of communications media (intranet, Sharepoint folders, bulletin boards, newsletters) identified as functional groups determine priorities
At the conclusion of due diligence and the decision to move ahead for final approvals, all of the pieces of the integration plan will be completed and the team will move ahead to begin the formal planning for the integration.
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Exhibit 7-Integration Complexity Grid Overview
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Integration Complexity Grid Overview:
Assessing the complexity of the integration assists Nordson in identifying the best candidate for the Commercial Integration Manager, which is a key appointment for the success of the integration project. We can identify the best candidate in several ways:
Using the Integration Complexity Grid, nine attributes of the integration are reviewed with the Business Unit VP, who is the sponsor of the acquisition.
Each attribute is mapped against a standard list of integration management skills
The result of the analysis gives us a customized integration management “job description”.
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Integration Complexity Grid
Category
Characteristic of Complexity
Low (1) High (5)
Score
1-5 Comments
1. Size of Transaction
Dollar value/ purchase price
Number of employees/size of acquiring BU
Up to $10 M 0 employees
>$550M >2500 employees
2. Target Location Proximity to
acquiring BU Number of
locations Number of
international locations
< 50 miles < 2 locations Zero
>1000 miles >10 locations > 3
3. Level of Cost Reduction
0% of sales
10% of sales
4. Type of Acquisition Stand-alone
Product bolt-on
Merger of equals
5. Talent to Retain
Few, replicable skills
Many critical skills, technology expertise
6. Perceived enthusiasm to be acquired
Agreeable
Hostile
7. Level of Process/Systems Sophistication
Low
High
8. Market Space
(core vs. step out)
Core
Step out
near adjacency far adjacency
9. Cultural
Compatibility
High
Low
Total Score:
Score will range from 9 – 45, with a scores 9 – 22 indicating a low complexity integration, 23 – 32 moderate integration, and scores over 33 as higher in complexity. The higher the complexity, the higher the level of skill required when selecting the integration lead
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Exhibit 9-Integration Manager Selection Criteria
Integration Manager Selection Criteria Level Required Comments
H/L
Nordson Corporate Experience
Ability to communicate with all types of audience(including foreign language skills)
Leadership competence, expertise/credibility(ready access to sr. leadership)
Sense of urgency and action orientation, entrepreneurial in approach
Ability to be an agent of change
Group facilitation and process skills
People and interpersonal relationship skills
Project Management skills
Conceptual and analytical abilities
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Integration Planning
From the functional work stream planning documents created during the intial planning phase and the results of the due diligence, we have a foundation for the integration, essentially the blue print on which to build the details of the integration plan. We are able to better understand the complexity of the integration, the identified key business goals, and the expected synergies.
Exhibit 10-Final Approval
As we move to final approval and the closing of the transaction, the integration planning begins and the final preparations are made including:
Announce Commercial Integration Lead & Integration Team Members
Begin data checklists, by function, for 100 day plan
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Integration Optimization100+ days
Planning Phase: Integration Plan begins to take shape
High Level Day 1 Plan
End State Definition : Level of Integration Determined
Final Approval & Signing
• Announce Commercial Integration Lead and integration team members• Begin pre-close data checklists to determine 100 day plan• Assess key talent at target company • Day 1 Plan development• Validate synergies and develop synergy capture plan • Communication Planning developed and approved• Determine workshops/training details • Design endgame and transition organizations• Optimize integration plan via process mapping/dependency tracking
Announce to close
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Functional leads will begin their checklists for the integration plan, using their high level priorities identified during pre-planning (due-diligence) process. This phase will begin the creation of individual work stream plans. At this time the M&A Manager will open the “Smartsheet” project planning. Smartsheet is a cloud-based collaborative project management tool that will be utilized, enabling real-time access to the current project management activities and secure access across the entire integration team and corporate management.
The key work streams identified for the first 100 days of the integration will accomplish the following:
Identify the high level tasks that must be completed during the first 100 days of the integration, based on the acquisition priorities.
o Each of these high level tasks must also identify an “end-state” goal that will signify the end of the integration process and the beginning of the integration optimization or business as usual.
Utilize these priorities to identify the functional workstream resources that will be required to achieve the end state goal.
Begin to build out action plans for the first 100 days of the integration.
Assess Key Talent at Target Company
Commercial Integration lead, business lead, and due diligence team will assess key talent at target company, for retention and participation in integration work stream activities.
Day 1 Plan development
Integration core team members (Commercial Integration Lead, M&A Integration Manager and Functional Leads) begin the development of the Day 1 plan. This plan will differ by the type of acquisition, location, etc.
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Also, identification of any market activities that may impact the first 100 days must be identified for resourcing of additional support, if necessary. These items may include:
o Major trade shows, customer events, o IT/IS activities o Contracts/Commitments
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Identify and Quantify Synergies
Each functional lead will be responsible for assessing and then finalizing synergies to be achieved. The initial synergies identified during due diligence will serve as a basis for the assessment. The end objective of this assessment will be a detailed synergy capture plan with the timing and savings to be achieved. In addition, new synergy opportunities may be identified and quantified during this phase.
Determine workshops/training details
Integration team leads to determine the participants, content and timing of any required training. Training modules in development include: Sox Compliance, Trade Compliance, HR related policies, SDP process, and Smartsheet training.
Communication Plan finalized and approved
Corporate Marketing Communications will create communication plans with assistance from appropriate business unit departments. At this stage, the plan and timing for hand-off to the business unit will be determined. See Communication Plan Section.
By the time we are at closing, the final integration plan will be read for review and approval by the Integration Steering Committee. The final integration plan will include the following:
o The Charter for the new combined companyo Organization structure defined o Functional workstream leaders identified along with each of
their functional teamso Integration Timetable with key milestones
Calendar for integration activities Key dates and deliverables Meeting schedules
o The 100 Day Plan with specific tasks This plan will be in the form of a Gantt Chart
generated using Smartsheet.
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o Communication Plan The Marketing Communication team will be
managing the output of the plan; however the content and deliverables are the responsibility of the communication functional team and the M&A Integration Manager.
o End State Goals for moving from integration to business as usual
Exhibit 11-Integration/Stabilization
Execution: Integration Management during Stabilization (100 Days)
Execute Day 1 Plan
Integration kick-off meeting and Day 1 plan implemented.
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• Execute Day 1 Plan
• Conduct Integration Workshops
• Develop Action Plans by Functional and Synergy Areas
• Confirm Synergy Targets and Align with Integration Teams
• Begin Weekly Functional Integration Team Meetings
• Identify Cross-Functional Dependencies
• Begin Oversight Meetings with Status Dashboards
• Communication Plan fully activated
• Finalize End State Definition with initial targets for timing
Integration/ Stabilization100 days
Integration Optimization100+ days
Plan of Record - Execution
Integration Management
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- Finalize Action Plans and Integration team members to prioritize/establish key functional work stream execution
Functional teams are responsible for the specific area of the Integration plan for their work stream, working towards the identified “end-state” for completion at in 100 days. These teams are responsible for refining and executing specific action plans and tracking synergies, depending on integration priorities.
Conduct Integration Workshops
Workshops will be conducted shortly after closing, as determined during the planning process. The determination of who requires training is an on-going process.
Confirm Synergy Targets and Align with Integration Teams
Begin Weekly Functional Integration Team Meetings
Weekly meeting will be held to by the Integration Project Manager, with the functional leads, with the objective of discuss progress to plan, resolve outstanding issues, identify dependencies that may arise, and answer questions on activities occurring during the week. Initially these meetings will be held weekly, and will be reduced as team progresses into the 100 day plan.
Action plans are always real-time in Smartsheet, so there is no need for sending weekly reports. Each functional lead is responsible for their action plan activities, and the project plan should be kept up-to-date for the weekly meeting, so the entire team can review all progress during the teleconference. See “Status Reporting Summary” (Exhibit 12, pg. 24).
Identify Cross-Functional Dependencies
Dependencies that cross two or more functional areas must be captured during planning, and therefore, will be visible in the Gantt Chart for the project. All team members must consider their key project tasks, the inputs they need, the outputs they expect to deliver, and how these activities impact other functional teams.
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Rather than focusing on simple “involved/not-involved” measures indicating where people fall in a project’s decision structure, we must capture and show how team members and their responsibilities impact each other.
Functional leads need to continually monitor what inputs they depend on, and what outputs they are responsible for delivering to others..
Begin Oversight Meetings with Status Dashboards
On a monthly basis, the integration team will meet for a comprehensive review with the steering committee, and Business Segment VP, resulting in a summary report submission to the CEO.
At this meeting, the detailed Action Plan Status Dashboard, Integration Synergy Dashboard, and Integration Budget Dashboard will be reviewed, and progress to plan will be evaluated. See “Status Reporting Summary” (Exhibit 12, pg. 24).
Communication Plan fully activated
Finalize End State Definition with initial targets for timing
All action plans must have a target date determined for the “end state” of the integration. The date may be adjusted due to dependencies and issues arising during activities, however, we to avoid confusion, scope creep and rolling delays, end state definitions and timing is required.
Exhibit 12-Status Reporting Process Summary
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CommunicationOverview
A Communication Plan will assist in developing and organizing the communications strategy needed to keep the key stakeholders, customers, and acquisition/integration team informed as we move through the phases of the integration process. Good communication is the lifeblood of a successful acquisition.
In order to be effective, the integration leadership must identify what needs to be communicated, what the communications should contain, who is responsible for generating the communication, what format or medium the communication should be delivered in, what frequency is needed to keep the target audience up to date on integration actions and finally, who is the target audience for the communications.
Effective communications will comfort employees, interest investors, improve decision-making, improve productivity and reduce waste and expense. Conversely, poor communication during an integration project can lead to misapplication of resources, employee dissatisfaction and attrition, and poor business performance.
Strategic Drivers that should be considered when creating a communication plan include:
Type of merger/acquisition – e.g., merger of equals, a voluntary acquisition
Whether the acquired/merged institution will remain a stand-alone and retain its identity, or be fully integrated and rebranded
Timing – whether immediate, or in stages Markets served – e.g., distinct separate geographic markets,
contiguous or overlapping markets Surviving (or new) vision, value proposition and brand
promise System capabilities and/or limitations, including core
processors and other system applications – integration plans and timing of changes
Anticipated community and/or employee impacts (plant closures)
Competitive opportunities and/or threats
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A C Q U I S I T I O N I N T E G R A T I O N
Alignment of product and service offerings
Assessment An assessment should be undertaken to guide the development of a comprehensive integration communication and marketing plan to support the integration objectives, which may include all, or any appropriate number of the following deliverables:
Employee Communication Customer Communications Media and Public Relations Community Communications & Customer Relations Other Marketing Support Product Offerings and Service Support Staff Training
Employee Communications
Employee communications should include all employees of both organizations and may include most or all of the following:
Executive/Sr. Mgmt/Key Employee Communications: Need to know employees will be kept informed as determined by integration leads and Legal counsel
Announcement: All employees meeting immediately following agreement, with a hand out or intranet posted “packet” of information including:
Media contacts and procedures Press release FAQs and talking points Timetable (initial plan) General employee impact if any
*specific contents depend on location and business unit
Ongoing Updates: Special email employee newsletter distributed
frequently throughout the process to keep employees informed of progress, developments, impacts, etc. This info could also be kept current on an intranet site.
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A C Q U I S I T I O N I N T E G R A T I O N
Staff Meetings – all employee or functional groups (great place to gather employee feedback)
Copies of all customer/member communications – with background info (if appropriate)
Customer CommunicationsPotential customer communications include the following, determined based on specific situation (may include: personalized mailings, emails, targeted phone calls, web site, and newsletter updates, social media, and more). Possibly develop a special acquisition web site section available to customers as a portal of information.
Initial Announcement : Develop and send an announcement communication to newly acquired company strategic customers.
Welcome or introduction to Nordson Corporation : Develop a welcome letter informational “packet” to impacted customers for distribution via sales managers that informs of key changes and emphasizing advantages and benefits, providing information on corporate facts, contacts, and other changes.
Customer Letters / Product & Service Change Notification : As applicable, develop and send communications to customers impacted by changes, to include description of changes, impacts and options; supporting collateral; applicable disclosures/terms & conditions; etc. depending on scope of changes.
Customer Feedback : Develop process for addressing customer concerns and questions with feedback loop to FAQs
Ongoing Communications : Develop targeted, multi-channel customer “on-boarding”, retention and potential cross-selling.
Media Communications and Public RelationsA media and public relations campaign is often the best way to gain overall support for acquisitions, and may include some or all of the following:
Media Plan:
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A C Q U I S I T I O N I N T E G R A T I O N
Develop list of media contacts for press release distribution and other Communications – including “friendly” publications/reporters that can be helpful supporters
Identify spokesperson who will represent both companies with the media, and community organizations or other interested groups
Develop key messages and talking points – including responses to sensitive or challenging questions
Press Releases, Interviews:
Issue press release announcing definitive agreement (approved by Commercial lead and legal)
Reach out to identified publications/reporters for interviews and coverage of the acquisition (if appropriate)
Determine and develop follow-up press releases, interviews, and social media
Social Media:
Update Social Media policy (2010)
General Communication & Community Relations
Depending on the circumstances of the acquisition, a visible reconnection with the community may be needed, and could include one or more of the following:
Community outreach: Identify meetings or events with community leaders to demonstrate Nordson’s commitment to the community and send a positive strategic message.
Community Sponsorships, Board Memberships & Community Involvement: Develop a strategy to integrate the community relations involvement and support and previous commitments made by the acquired organization as long as they are consistent with Nordson’s brand, vision and value proposition.For more information regarding Nordson Foundation, navigate to the following websites:
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A C Q U I S I T I O N I N T E G R A T I O N
http://www.nordson.com/en-us/about-nordson/community/pages/nordsoncorporationfoundationwelcomepage1.aspx
http://www.nordson.com/EN-US/ABOUT-NORDSON/COMMUNITY/Pages/About-the-Foundation.aspx
Additional Marketing Support to consider in Communication Planning:
Branding: Execute the branding plan as described in the process (see Exhibit 13 Acquired Brand Decision Tree Tool). Depending on scope, standardized graphic guidelines must be communicated internally and externally.
Exhibit 13-Acquired Brand Decision Tree Tool
Marketing Plan and Calendar:
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A C Q U I S I T I O N I N T E G R A T I O N
New acquisition needs must be built into and follow the annual calendar and budget specific to Nordson’s Marketing Plan. The overall marketing plan includes:
Collateral Media Direct Marketing Marketing campaigns and promotions Promotional items Events (trade shows, receptions, etc)
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A C Q U I S I T I O N I N T E G R A T I O N
Appendix A. Summary of Acquisition/Integration Process
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Business Case, Valuation, & Analysis
Pre-Approval & Terms
Final Approval & signage
Announce to close
Integration/ Stabilization100 days
Integration Optimization100+ days
Integration Management
Project Management
Draft Plan of Intent Plan of Record
Due Diligence
Business Strategy
GTM Strategy
Product Strategy
OrgStructure
Cost and Synergies
High Level Project /Scope Plan
High Level Day 1 Plan
Disc
over
y an
d Du
e Di
ligen
ce
End
Stat
e De
finiti
on
Estab. Team & Gov.
Day 1 Plan
Detailed Project Plan
Cost and Synergies
OrgStructure
Work stream
Work stream
Work stream
Work stream
Work stream
Work stream
Opportunity Evaluation
Summary of Acquisition/Integration Process
A C Q U I S I T I O N I N T E G R A T I O N
Appendix B. Integration Communications
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Who Needs the Communication -Audience
What needs to be communicated
Description of Content
Who is responsible for generation
Type/format ofComm.
When or Frequency
Target Company Strategic Customers
Announcement of acquisition with Nordson welcome with high level info.
What does the acquisition mean and how will it affect day-to-day operations
BU Marcom Executives make calls to c-suite counterparts
Closing
All customers at Target company
Announcement of acquisition
Press release info with answers to relevant questions
Corporate Marcom Email and/orletters to all customer contacts
Closing
Integration Communications – CustomersObjective: An ownership change can cause anxiety among existingcustomers. Assure strategic customers that the change is positive and will have minimal impact on relationships.
A C Q U I S I T I O N I N T E G R A T I O N
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Who Needs the Communication -Audience
What needs to be communicated
Description of Content
Who is responsible for generation (content)
Type/format ofComm.
When or Frequency
Target Company Employees
Announcement of acquisition with Nordson welcome with high level info.
Why company sold?What can I expect in the coming weeks?Who is Nordson and where do I get more info.
Corporate MarCom All EmployeeMeeting and/or Teleconference with posted packet of info
Closing
All Nordson Employees, including new employees
On-going updates on integration activities.Solicit feedback to support employee morale
Progress of integration, developments, impacts, copies of customer communications
MarCom Integration Leads
Email / Intranet site if available, Postings (bulletin boards)
Weekly / updatedinternalwebsite with FAQ
All Nordson Employees – more detailed info to affected BU customer facing employees
Talking points on the deal rationale, list of contacts for further info.
Information relevantto the deal, help employees to answer questions from customers
Corporate Marcom Email or Intranet site if available
Once at closing, Intranet post and update
Integration Communications – EmployeesObjectives: A sale announcement will be unsettling to employees, and traumatic to some. It’s human nature to initially perceive change as a negative. We must work to position as a positive and be reassuring. This well help to alleviate fears to increase morale, maintain quality and discourage defection.
A C Q U I S I T I O N I N T E G R A T I O N
Appendix C. Action Plans
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Human ResourcesEmployee Data in WorkdayPTO transition planningCompensation PlanningEmployee Data Collection and ActionsHoliday Schedule FinalizedPayrollLegal Documentation ReviewHR Processes and AdministrationHR Policies and TrainingWorkplace Safety Issues
Insurance and Administrative ServicesD & O InsuranceDetermine date when company is included in Nordson's insurance programDetermine on-going status of Life Insurance PolicyIntroduce Nordson Travel ServicesBusiness Travel Accident Insurance
Information Systems (IT/ IS)Order WAN circuitsExchange Active Directory InformationEvaluate existing IP addresses, make recommendationsComplete high level security audit to identify gapsInventory, then evaluate current computer environmentIdentify existing IS support organization - gap analysisMigrate Users and PCsComplete Integration scope document for Phase II
Supply Chain ManagementComplete thorough financial & operational assessment of the major & critical suppliersConduct assessment of purchasing organization, systems & methodsPreliminary assessment of supplier sourcing potential opportunities
A C Q U I S I T I O N I N T E G R A T I O N
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LegalElect new Officers and DirectorsInform Nordson's insurance representative of new Officers and Directors for inclusion in D&O policyIntroduce the legal department via PowerPoint presentation and via phonePhone interview with company employee(s) who are most familiar with litigation (past and present) and any other legal matters concerning the companyContact existing outside attorneys and discuss procedures for ongoing litigationRevoke POAs for bank accounts and any other purposesGet consent on any contracts that require consent upon change in controlConfirm whether any other contracts, permits, etc. need consent to assignExamine terms and conditions of customer/ supplier agreements for better understanding of those conditionsLease -- complete statement of conditionsConfirm terms of 401(k) planCustomer audits showing major concerns surrounding unapproved supplier of calibration services and lack of clarity regarding the use of conditionally-approved suppliers. Minor concerns re the need for better documentation of records and improper validation of automated equipment.If products will be sold into Europe, need to obtain compliance with EU standards (make an analysis and begin process within first 100 days).If products will be sold into Canada, compliance with Canadian standards should be obtained.
Intellectual PropertiesEmployee Agreements (key employees signed)PatentsTrademarksDomain Names
Global Trade ComplianceGTC Trainings and Assess Risk EnvironmentGeneral InformationDetailed Export InformationECCN (ECN) Supplier PollingDetailed Import InformationDenied Trade Screening Process ReviewFree Trade Programs Process ReviewTrainings Programs ReviewHarmonized Tariff Schedule Classifications Process ReviewCountry of Origin Process Review
A C Q U I S I T I O N I N T E G R A T I O N
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Environmental ComplianceVisit Acquisition Facility – Meet and Greet of facility and environmental personnel and general program and information exchangeCompliance Audit to regulations and Best PracticesGap analysis and development of environmental compliance planPrioritize immediate actions, Improvement plan Development and ImplementationOngoing maintenance of programAll acquisitions facilities incorporated into annual program
Product ComplianceVisit Acquisition Facility - Meet/ Greet w/ product compliance personnel and general program/ info exchangeCompliance Audit to Regulations & Best PracticesGap Analysis and Develop Product Compliance PlanPrioritize immediate actions, Improvement Plan Development and ImplementationMaintenance of ProgramAll acquisitions facilities incorporated into annual program
Safety and Security ComplianceVisit Acquisition Facility - Meet/ Greet facility/ safety/ security staff & general program/ info exchangeCompliance Audit to Regulations & Best PracticesGap analysis and development of Safety & Security compliance planPrioritize immediate actions, Improvement Plan Development/ ImplementationMaintenance of ProgramAll acquisitions facilities incorporated into annual program
A C Q U I S I T I O N I N T E G R A T I O N
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FinanceProvide copy of NDSN Financial calendarProvide flash sales template and instructions to acquired companyProvide sales update template and instructions acquired companyInsurance and travel call with Manager of Insurance and Administrative ServicesProvide historical regional sales data to Corp Acctg"Cash call" with TreasuryOpening Balance Sheet/ Proforma InformationLeasesQ4 sales forecastQ4 P&L forecastProvide backlog report templates and instructionsDetermine company code and LOBObtain last 52 wks sales and shipments for historical backlog reportingBPC trainingIntercompany transfer pricingOH meet and greetsFinancial close in BPCYear End Reporting PackageU.S. GAAP Policies
TreasuryBank Account & Electronic Transfers DocumentationConvert bank accounts to Key Bank as neededTreasury Questionnarie - Foreign Exchange, Retiremement Plan, and Real Estate
Tax
A C Q U I S I T I O N I N T E G R A T I O N
Appendix D. Functional Action Plan
Integration of an Acquired Company to Complywith Nordson Corporation IP Practices
TASKProjected
Completion Date
Completion Date
I.Employee Agreements
A. Determine if current Employee Agreements exist and/or are acceptable.
B.For all key/critical employees (i.e. sales, technical, managerial) who do not have a sufficient Employee Agreement, they will need to sign Nordson's standard Employee Agreement.
II.Patents
A. Determine what Patent decisions require immediate attention.B. Review current and recent developments for potential inventions (patent applications) - meet with engineers.C. Institute invention disclosure process.D. Review any IP licenses that are in place which require the ongoing payment of royalties or other ongoing activities.E. Review any IP development agreements that are in place which require ongoing activities.F. Execute assignment documents for all patents and pending applications to transfer them to Nordson Corporation.G. File Executed patent assignment documents with the Patent office(s).H. Identify who will be responsible for IP matters (contacts)I. Establish PFC meetings and standard countries.J. Seminar on Patents.K. Meet with current patent attorneys? L. Determine which associate law firm will handle patent prosecution, both current and future.
M.Transfer/copy Patent files (physical/electronic) to Nordson Patent Department, especially any pending patent applications and original Patents.
N.Determine if there are engineering locations that may be subject to national inventor laws (i.e. Germany) and determine if an inventor compensation program is in place and/or sufficient.
O. Transfer/copy all IP due diligence files to General Legal's acquisition files.
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A C Q U I S I T I O N I N T E G R A T I O N
TASKProjected
Completion Date
Completion Date
III.Trademarks
A. Execute assignment documents for the transfer of all trademarks to Nordson Corporation.B. File executed trademarks assignment documents with Trademark offices.
C.Review trademark portfolio to determine if additional trademark applications need to be filed in the U.S. and/or foreign countries.
D. Institute trademark clearance procedures.E. Review actual trademark usage.F. Seminar on Trademarks.G. Obtain copies / original Trademark files and Trademark certificates.
IVDomain Names
A. Determine what domain names are owned and determine how they will be maintained.B. Transfer domain names to Nordson Corporation.
V.Secrecy Agreements
A. Establish procedures for the handling of NDA's.B. Establish who can sign NDA's.C. Provide standard secrecy agreement forms (To/From/Exchange).D. Give a seminar / webinar on NDA's.
VI.Sales Terms & Conditions
Review T & C’s with General Legal and institute Nordson patent indemnification clause.
VII.Supplier Agreements
Review existing supplier agreements - amend / use Nordson template.
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