+
Post Merger IntegrationWinning Strategy for: Post Merger IntegrationGnostam Consulting
+It’s Like this…..
Acquirers destroy value of acquired company in 60% of acquisitions undertaken, [Academic data, Wharton School];
BUT: Winning acquirers put right M&A strategy in place, especially in cross border acquisitions.
+Help!
+Best Practices
Move Quickly: Change is expected!
Establish Strategic Framework for Decision Making: Articulate what is NON NEGOTIABLE
� RESOURCES: Ensure budget exists for Integration
� CULTURE: Identify resistance in organization
COMMUNICATE: Formalize communication through steering committee, communication plan
ACTION: Formulate a 100 and 360 day Integration, with detailed time line
MEASURE: Performance Versus Benchmarks
PRIORITIZE: Make recommendations to Steering Committee for any changes of priority
FOCUS: On high NPV with high probability of success, [Decision Trees]
+Basics
+ARTICULATE INDUSTRIAL LOGIC
+ EXAMPLE OR TIME LINE USED IN PEPSICO
+DO NOT SILO!!!
+Do it Right, in Right Language
Steering Committee
Sales,Cross
Functions
ProductDevelop
mentFinance Operations Quality IT, Back
office Integration
+ RESOURCES
Acquiror Co.Acquiree
Overlap area:
This group has highestCapabilities;Empowered for change;Drive Accountability through steering committee;Supported by external Advisers.
Tax
External Advisors
These groups focused on day to day jobs
Legal
IT integrationHR, Other, benefits
+Cultural Considerations
Cultural considerations are 80% of reason integration fails. Must commit to cultural integration at highest level of organization;
Cultural integration involves all areas: it is not a one time. It is complex because building trust in organizations that are undergoing change is very time consuming and complex;
Can only be done in teams including both managements;
Take time to explain, communicate, train, educate, both ways! Be transparent.
Culture re-inforcers:
1. Develop clear policies;2. Goals… Measure them!3. Recognize achievements;4. Invest in staff, selection of staff; 5. Invest in training;6. Create dedicated events;7. Reward leadership, conflict
resolution8. Emphasis on communication9. Improve physical environment10.Reorganize continuously.
+COMMUNICATION BREAKDOWN
Avoid it! It is very expensive. Shareholders pay for it!
FOCUS ON TELLING A STORY. Be accountable.
Target personnel may have been highly disappointed in past, career progression blocked….
Introduce broad strategic goals, then focus on implications for functional areas;
Impact of integration is often burn-out of most talented staff!
+EXECUTION
Rescue CollaborationContested Situation
Raid
Cooperative Adversarial
Acquisition Postures
Also depends Critically on type of Acquisition…
Raid more risky, thanCo-operative situation: see Acq Posture below.
+LEGAL
Earn-out formula’s, clawbacks…. The hard stuff..
Revenues, gross margins, not EBITDA.
Time frame, months not years…
Post closing tax effects.
Incentivize decoupling from “bridge systems”;
Penalties for delays.
Sign by close of deal;
Incentives, stock options, bonuses, relocations, role change, departures from company.
Definitive Agreemen
t
TransitionServices
Employment Agreements
+ Bio & Contact
Philip has 30+ years of consulting M&A experience with PWC, IBM, various investment banks, and with his own firm Gnostam since 2004;
30 + years of global cross border due diligence merger integration;
Cultural integrations and fluency in 5 languages;
Industries, Finance, Insurance, healthcare, Maritime, Energy, IT and Data Mining.
Tel +1 206 384 0069
Education: BSc Economics University of
Bristol
MBA London Business School
Decision Sciences Stanford
Marine Captain, 1600 Tons
Oceans