FINANCE & MANAGEMENT

END TO END M&A

We support our clients through all stages of an M&A process – from target selection and confirmation of the investment thesis, to the post-merger integration and capture of value. Our approach, based on 25 years of experience across sectors and geographies, is results driven, pragmatic, and collaborative

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:

Single Acquisition Consolidation: Buy & Build Joint Venture & Alliances Divestitures and Carve-Outs Majority and minority participation: different levels of autonomy and need for alignment with the Board and other investors to carry out activities.Distressed asset in need of a turnaround: quick action in identifying the critical points of the operation to act in the moment of taking control, implementing governance and capturing synergies short-term efficiencies.Split offs and Carve-Outs: definition of the critical points for a stand alone operation, control of TSA (Transition Service Agreement) and monitor function and professional transitions.Assets with low level of governance: accelerate takeover, implementation of best governance practices and control points in critical processes. Context of the investment

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.

SOLUTIONS: Define the investment strategy and structure the business case, analyzing the market and identifying the value levers of the target business, with a focus on defining the expected viable results and mapping the risks involved. Market Scan & Target ScreeningInvestment Thesis Confirmation Confirm the "market value" assumptions and deepen the understanding of the operation and confirm the expected results, identifying the value levers, the main bottlenecks of the operation and potentials short and medium term operational gains. Due Diligence AssessmentSynergies EvaluationValuation Prepare the process of taking control and integrating the business, ensuring the prioritization and planning of activities with a focus on business continuity, capturing synergies and monitoring critical decisions for the business through out the process. Takeover & 100 D PlanCommunication andRetentionP lanChange ManagementSynergies Capture Act in the creation of business value, through levers and projects that improve business performance and generate medium and long-term results, in all areas of the business: Commercial Operation and Administrative. Strategic PlanningOrganic GrowthInorganic GrowthWorking Capital releaseCost Optimization Evaluate investment exit alternatives that generate greater return on investment and ensure the planning and execution of the actions necessary to complete the divestment successfully. Exit StrategyNew Operational ModelDivestment Plan BUSINESS CASE & INVESTMENT THESIS DUE DILIGENCE & SYNERGY EVALUATION POST-MERGER INTEGRATION BUSINESS OPPORTUNITIES DIVESTMENT INVESTMENT PHASE PORTFOLIO MANAGEMENT

SUCCESS STORIES

CHALLENGE

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.

APPROACH

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.

RESULT

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.

CHALLENGE

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.

APPROACH

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.

RESULT

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

CHALLENGE

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.

APPROACH

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.

RESULT

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.

CHALLENGE

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.

APPROACH

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.

RESULT

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.

CHALLENGE

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.

APPROACH

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.

RESULT

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.

INDUSTRY EXPERIENCE

Our M&A approach adapts to industries of every sector – we serve industries going through an M&A process by themselves and private equities that are more used to M&A processes.

TALK TO US

Augusto Ribeiro

Augusto Ribeiro is a Managing Partner at Integration and has been working since 2003 in the Marketing & Sales practice. Augusto built a solid international experience, leading and implementing strategic Marketing & Sales projects in industries ranging from Consumer Goods through Construction & Property Development to the Financial Industry, especially in the Private Equity sector.

Carlos Lima

Carlos is the President of Integration and a Founding Partner. Carlos has worked with leading international companies across the globe as a consultant for the last 30 years and has developed a particular specialization in Marketing and Sales. He is considered an expert in the Consumer Goods sector and on the topics of Commercial and [...]

Carolina Flores

Since 2010 Carolina has been working in our Finance & Management practice, helping our clients across industries achieve important transformations. She has often been involved in projects of large and international scale supporting organizations to achieve their financial objectives through efficiency programmes, Organizational Structure changes, Synergy Evaluation and PMI to name a few.

Daniel Rodrigues

Daniel is a Director within our Marketing & Sales practice and leader of Integration’s TechLab. Over the course of over 10 years with Integration, Daniel has helped clients from diverse industries and countries with digital and commercial challenges ranging from Go-to-Market Strategy to Commercial Due Diligence. Through his extensive business experience Daniel ensures that our [...]

Francisco Pereira Leite

Francisco is a Managing Partner and has been working within Integration since 1999. An all-rounder, Francisco has moved across our practices, working for the first eight years with focus in Supply Chain and then increasing his scope to the Finance & Management and Implementation areas. His experience over more than 150 projects includes Implementation and [...]

João Vilela

Since 2009 João Paulo has been working in our Supply Chain practice. During this extensive period, João Paulo has led projects across numerous continents and in several sectors and areas of Supply Chain. He has worked on challenges such as Logistics Network Design, Transport Efficiency, S&OP, Order-to-cash, Stock Management and Supply Modelling.

Lucas Tavolaro

Lucas joined Integration in 2011 and found his home in our Finance & Management practice. He has supported our clients in the creation Strategic Roadmaps, M&A synergy evaluations, Go-to-Market strategies, Cost Efficiency and Strategic Sourcing projects. His experience includes sectors such as Consumer Goods, Construction & Property Development, Education, Private Equity, Oil & Gas, and [...]

Luis Bernal

Luis is a Manager in the Marketing & Sales practice. Originally from Columbia, Luis is an entrepreneur at heart, and has worked in several start-ups in Colombia, receiving his MBA from IPADE. He has accumulated international consulting experience whilst working across the United States, Mexico, Caribbean and Central America, Colombia and Brazil in industries such [...]

Luis C Vidal

Luis is a Managing Partner at Integration where, since 1999, he has been working in the Supply Chain practice. During this period, he has led projects in the most diverse sectors and in themes such as Logistic Optimizations, Process Efficiency, Planning (S&OP), Industrial Strategy, Go-to-Market Strategy and Distribution Structure. His international experience encompasses the opening [...]

Matt Suggett

Matt Suggett is a Director at Integration, with significant consulting experience in projects such as Commercial Strategy, Market Entry Strategy, Pre- and Post- Deal M&A, and Organizational Redesign. He has supported clients in industries ranging from Consumer Goods and Healthcare to Metals & Mining across four continents. He holds a master's degree in Management from [...]

Renata Moura

Renata is the Managing Partner responsible for the Leadership & Organization practice established in 2016. Renata has over 20 years of professional experience, having worked in 5 different companies and segments. She began her career at AMBEV in the consumer segment, then participated in the privatization of the telecommunications sector at OI and the consolidation [...]