The project challenge was to make the JV operational from Day One, considering two simultaneous spin offs and mergers.
M&A is a growing phenomenon in all industries, businesses and large organizations. from start-up companies to large multinational companies. In our experience, we have found that there are many different drivers for sustaining inorganic growth:
To acquire specific knowledge or technology
To increase, complement or revolutionize the value proposition to the customer
To launch a new product or service
To gain scale
To expand into new countries or regions
To refresh cultural characteristics
To test a strategic thesis on a limited and controlled scale
To mitigate risk through differentiation of revenue streams
But - M&A is always a very profitable idea and has a huge impact from setting the target to closing. Even after setting the right goals, it is often difficult to properly assess financial health and performance, achieve fair prices, negotiate with stakeholders, and set propulsion strategies in a legal environment.
tasks and responsibilities and risk to create significant opportunities.
Develop and implement appropriate management systems to monitor management, facilitate change, and make quick decisions in accordance with legal procedures (such as TSA, TLA, restrictions on license changes)
Clarify strategy, actions and data to support consistent communication with the wider team from day one
Update business data and analysis based on factual data, responsibility, timeline and with Investments that need to be integrated, create a strategy based on the integration plan
Understand the different cultures of the organizations and define the new culture, retaining key employees and helping the team from day one
Define the organization to get the most out of skills Work in both organizations while maintaining coordination of funds
Agreeing on where the strategy should be integrated and therefore the tools needed to complete the change (integration, process, management) to minimize the impact on customers
Looking at these challenges in the post-merger integration process, it's easy to understand why many deals don't happen on investment thesis or four business desks.
We work with our clients to tackle challenges in each of the three major milestones: initial integration planning, integration execution and business optimization.
At all stages, we guarantee the main pillars for a successful PMI:
Investing in a robust Post-Merger Implementation approach brings tangible benefits:
ensuring coherence and preventing deviations from business case/investment thesis
on-time execution of activities, respecting key deadlines while adjusting to uncertainties
promotion of a collaborative environment throughout the integration process
optimize resource time to maintain base business in parallel to the integration, while closely tracking interdependencies
use of a clean team, unbiased and compliant with regulatory guidelines, to bring relevant challenges and simplify access to confidential information
robust synergy capture plan with close monitoring against deal goals
manage communication actions across the business in line with strategy
full impact analysis of human impacts and cultural transition plan
Interview the relevant organization's C-level to understand the logic and purpose of the business, the context of both the organization and market copy, and validate the stated objectives.
With clear business objectives, we define the integration strategy, identify key points for the roadmap, and work with leaders to identify the business front needed during the PMI. We make this idea a reality by simplifying key decisions that help teams make it (e.g. organizational change, language definition).
We prepare and relate plans for integration, implementation and communication (day 1 and phase 1) based on input from frontline managers and review the team's needs and concerns.
ensure timely completion of all tasks, demonstrate the effectiveness of work to the leaders and team of the two organizations through strong management, and support decisions to mitigate risk and adjust changes as needed, documented and communicated to ensure.
CHALLENGE
A top player in the Brazilian Health Sector (open capital, with more than 4m members and+20 hospitals), with strong background in M&A, acquired one of their main competitors – increasing members by 25%, and the network by one large hospital and ~20 medical centers. Although the client was experienced in acquisitions, the integration was complex – incorporating a family-owned company, with a different integration strategy, and different business model, from which synergies and best practices needed to be identified. The target of the integration was to increase revenue by ~$250m/year and capture ~$56m in synergies in a 2-year horizon.
APPROACH
We supported the integration of the two organizations by coordinating specialist teams to identify business models’ differentials and best practices, managing internal expectations to speed-up results without putting the main strategy at risk, implementing a clear decision making governance, and mapping talents from the acquired company to ensure retention. After the take over and initial integration, our client’s decision was to accelerate the full integration by 2 years, to be completed by the end of year 1. We worked with the client’s team from the takeover preparation and execution of the first 100 days’ integration, to supporting targeted, strategic projects which enabled synergy capture.
RESULT
Full Integration achieved in year 1 – with first year results in Revenue and EBITDA achieved – retention of key employees, successful management of the network optimization (consolidation of 3 key hospitals across networks, becoming one of the top 5 hospitals in Brazil following process and infrastructure improvements), merge of call centre operations into a third party, and merge of clients and members.
CHALLENGE
A global food organization acquired a family-owned Brazilian business as part of its expansion into emerging markets. The strength of the acquired business portfolio, including sales and distribution, combined with the know-how and capabilities of the global organization, created an opportunity for business expansion in Brazil.
The focus of the PMI was on the human aspects of the integration: the strategy was to integrate the companies, taking advantage of best practices and synergies, while preserving the strengths and culture of the family-owned business.
APPROACH
Integration’s approach was based on defining a clear end-state vision from which the longer-term roadmap was built, designing the new organizational structure, understanding cultural differences and incorporating them in communication, creating a customized talent and retention package and implementing an effective stakeholder-management process throughout the integration.
RESULT
Successful communication to more than 3,500 employees, zero negative impacts to clients or the market, new organizational governance and structure launched on Day One and structured integration roadmap with a clear path to combining the strengths of both business units.
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 a unique project governance and workfront 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 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
Our client, a multinational toy retailer, had been focused on sustaining growth in home markets (UKI) when an opportunity arose to acquire the Central European divisions of a key competitor. This was the first acquisition the client had made, and roughly doubled their revenue and number of stores.
Integration was asked to support several challenges the client was facing after execution had already begun – uncertainty among leadership on the progress towards key milestones, a 4 month delay in a major IT go-live, a lack of project plan and structure, misalignment between teams, a clash in organizational cultures and a tight timeline for go-lives and TSA exit.
APPROACH
Integration worked closely with key employees from both sides of the business to understand the most critical issues and needs, providing Program Management support to the execution, to accelerate progress towards key milestones and drive complex changes to deliver exit-TSA commitments under an extremely tight timeline.
In parallel, we brought change management support to help in the initial period of the integration between both businesses, running a program focused on codifying and embedding a new corporate culture.
RESULT
Our support enabled a smooth and swift transition which delivered:
Our PMI approach applies across industries – we work for businesses that have gone through the PMI process themselves, and private equity more accustomed to the PMI process.
Dhruv Patel is an engagement manager at BMCS and has been working since 2019 in the Argentinean office in the Supply Chain Practice.
Aarush Gandhi is a Manager at BMCSwith significant experience in Supply Chain and Implementation having worked across both of BMCS practices.
Nikhil Singh is a Director at BMCS and has been working since July 2011 in the practice of Marketing & Sales. Prior to BMCS, Jonathan was an Analyst
Keshav 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
Chaitanya Varma is a Financial Controller at BMCS and has been part of the Finance area since January 2011. Her experience includes financial analysis.
Rishi Sinha is a Specialist on Supply Chain Strategy at BMCS, working since 2010 at the firm. He has over 20 years of experience in Supply Chain collaborating with companies
Knish is a Managing Partner and has overseen the Mexico City office since 2008. Prior to BMCS, Gerard accumulated 25 years of experience in executive positions at L’Oréal
Rajbir is a senior manager I within the Implementation practice at BMCS, and has been part of the team since July 2011. His experience includes leading transformational projects.