What challenge(s) do our clients face?
M&A is tough! Research and our experience show that at least 50% of M&A deals do not deliver their expected value.
The gap between M&A objectives and reality can usually be attributed to one of two causes; poor planning, or poor execution. Integration works together with our clients across both dimensions, bringing our expertise to help you avoid the most common mistakes.
During the planning phase, we often see:
- A lack of compelling strategic rationale
- Inadequate due diligence
- Overstated synergies
- Payment of an unrealistic price
- High and/or risky leverage
In execution, there can be additional issues:
- Poor and/or divided Leadership
- Unstructured approach to monitoring the integration
- Inadequate pace: too slow or too fast
- Division through conflicting cultures
- Inadequate communication and disillusioned teams
How do we help?
We work with our clients throughout the deal cycle, ensuring an effective M&A process, and helping to generate and capture the maximum sustainable value.
Our methodology supports our clients to:
- Establish a clear rationale on how the deal will create value, connected to the business plan
- Guarantee a thorough and disciplined due-diligence of all aspects of the business, to confirm key value levers
- Adopt realistic assumptions not only for synergies, but also for anti-synergies, and build estimates based on a deep understanding of the business and industry
- Define the integration strategy and takeover plan, considering the risks and challenges
- Identify and address cultural conflicts upfront, and incorporate the necessary change management actions throughout the process
- Train and empower individuals and teams to own and lead the synergy estimation and capturing
- Guarantee the adequate leadership, resources, and governance for the integration process
- Plan and execute the integration with rigor and speed
- Strengthen the governance and risk mitigation loop based on reality to ensure clear interdependencies and needs are met quickly
We help our clients in different inorganic strategies and contexts:
What are the benefits?
There are multiple key benefits of employing a best-in-class M&A strategy:
- Create alignment between stakeholders and reality: Understand individual expectations and drivers, and address gaps vs. The context of the deal and target
- Improve completeness and monitoring of investment thesis: Analyze and document thesis pillars, core assumptions, expectations and synergy building blocks, clarifying the rationale and decisions driving their evolution over time
- Increase accuracy of synergy calculation: Develop tailor-made financial simulators based on your reality to estimate, add and phase synergies, at a high level of granularity
- Improve risk identification and action planning: Build a complete risk assessment with feasible action plans, considering factors internal to the deal as well as market movements
- Increase value captured through synergies: Implement an effective governance to track synergy capture, bring focus and enable agility in response to diversions
- Guarantee understanding and consideration of critical soft success factors: Identify and incorporate soft value creation levers that are crucial for the post-merger integration into assumptions, risks and planning
- Protect the day-to-day of base business: Minimize disruption to your core business by limiting the need for resource reallocation
- Empower your teams: Prepare your professionals to use the technology, tools and method to estimate, apply and capture financial synergies, to ensure sustainability in the approach and prepare for future challenges
How does it work?
We tailor-make all of our solutions based on the reality of your business, the context of the deal, and the stage of the M&A process.
A global beauty and personal care company announced the global acquisition of 40+ brands from a competitor, increasing the company’s revenue 100 percent. The integration followed the carve-out from the original company and required a turnaround in the logistics and manufacturing network to achieve significant operational and financial synergies.
The consolidation process was extremely challenging because it required a high level of coordination across +250 professionals in +30 countries in Europe, USA, Canada and EMEA, +15 production sites and +76 distribution centers around the globe.
Moreover, the benefits related to this integration were desired to be captured as early as possible given the strategic importance to the company worldwide.
Given the accelerated timelines and complex challenges, a large Integration team was deployed to work full on site, bolstering the client team. This ensured close proximity with all stakeholders, on the job training/change management for staff, better communication across the countries and an ability to resolve unforeseen issues swiftly.
We assumed the project management responsibility of the Manufacturing Footprint and Distribution Centers consolidation programs preparing a detailed plan considering all involved regions, business areas and processes. To ensure the forecasted synergies would be realized, a robust PMO was deployed to track not just deliverables, but also operational objectives and benefits.
We supported the client in delivering the integration in a very aggressive timeline with minimal business disruption. Including the closure of some manufacturing sites in addition to the transfer of production lines. In distribution, in just 6 months we coordinated the building and starting-up of distribution centers across multiple countries and managed the incorporation of 3rd party logistics.
Beyond the business implementation results, Integration ensured the engagement, alignment, and cooperation along the entire transition of the +30 involved countries. This ensured sustainable operational transformation after our team had rolled-off.
After the multi-million-dollar acquisition of a national consumers goods manufacturer by a global household brand, Integration was hired as the clean team, to plan and manage the Post Merger Integration process.
The strength of the acquired business’ portfolio, including sales and distribution, combined with the know-how and capabilities of the global company created a great opportunity for business expansion; however, given the large sizes of the two companies and the different cultures, meant it was not a simple task to ensure integration without business disruption.
Given the size of the deal, our main goal was to ensure the two organizations would be working together as one right from Day 1, avoiding any major operational issues. With this in mind, we focused on developing (i) a clear and specific roadmap to concretely define the companies end-state vision and integration strategy, from transition plan to the longer-term and (ii) a highly detailed 100 Day plan to ensure teams and actions could be highly coordinated in the early phases.
On the people side, we needed to work across parties to ensure the people, cultural strengths and best practices of each company were preserved. An effective stakeholder-management process was implemented in an intensive and frequent basis to monitor and address engagement, concerns, and ensure professionals commitment and performance along the merger process.
The success of the implementation was characterized across multiple metrics:
- From Day 1 there was minimal disruption to operations – with business KPIs all remaining in optimal levels
- The synergies outlined in the Business Case were realized
- Successful internal communications to more than 3,500 employees with 100% of key professionals staying within the company during the transition
- External communications, that resulted in no negative impacts on customers, providers, or market perception
A specialized toy retailer chain acquired the DACH business from a global leisure goods as part of their expansion strategy, doubling the company’s size and a number of stores. The business was carved out and subsequently integrated.
Integration provided Program Management support of the execution to accelerate progress towards key milestones, and manage complex changes to deliver exit-TSA commitments under an extremely tight timeline. In addition, we provided change management support to drive team cohesion and reduce human impact in the initial period of the integration across both businesses.
We ensured common goals across the Leadership team, successful and on-time delivery of legally binding commitments (system go-lives, full store rebranding), defined an integrated organizational structure, and prepared the transition plan towards it.
An organization specializing in prepaid corporate services, and operating across 42 countries, made a strategic alliance with one of the largest players in Brazil to become the market leader in fleet management of light trucks and cars. This joint venture represented the largest investment in the history of the organization, turning Brazil into a hugely important operation for the group.
The project challenge was to make the JV operational from Day One, considering two simultaneous spin-offs and mergers.
Integration worked as a Clean Team to design the operational model, commercial strategies, remuneration equalization drivers, synergies identification, internal and external communication management, and organized the closing preparation.
Given the confidentiality, size of the deal, legal criticality (evaluated by the Competitions Agency), and the cultural differences between the two organizations, we created unique project governance and work front arrangement that involved more than 30 consultants and 50 top executives across the two clients. Due to the importance of systems integration (not under Integration responsibility) we ensured as a PMO that all work fronts were closely aligned with the system needs/architecture to protect full-service continuity.
As result, the organization was able to operate JV from Day One, without sales disruption, with a minimum approval period process from the antitrust regulators and with no restrictions – credited by legal advisors as to the result of an efficient Clean Team with knowledge and respect of legal regulations during the process.
We achieved an operational integration in record time – two months for core finance processes, accounting and systems interfaces, and synergies which would increment % profitability by more than 5p.p were confirmed, with clear implementation leaders. As a result of well-planned external communications, client attrition was reduced to lower than expected levels and brand image recognition improved.
A Brazil-based pharmaceutical organization with operations across Latin-America focused on manufacturing, marketing, and distribution of OTC and Prescription drugs, had defined an ambitious geographical expansion strategy. As part of its recent acquisitions, the organization acquired a pharmaceutical-laboratory in Chile.
The client needed help to plan the integration and migration of all production to the newly acquired manufacturing site while ensuring no business disruption across all functional areas. Additionally, support was requested on the development of a Change Management workstream focused on supporting the communication, talent retention, and HR components of the integration.
Integration’s PMI project addressed three main needs in the integration: 1) the creation of a production migration strategy for both the acquired and existent portfolios, 2) the creation of a detailed plan to monitor the integration, 3) the development of a Change Management strategy and plan to ensure HR stability and readiness for the integration.
As a consequence of the acquisition, the company escalated 20 positions in sales ranking in Chile, doubling its net sales and building a stronger portfolio and stable operation.