Proposal for Post merger

integration – Group 6
MBAZG541 (Assignment)
BITS Pilani Consultancy Practice
Pilani|Dubai|Goa|Hyderabad Group #

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Present situation

Company A is acquiring Company B

Size of the Organizations:

– Company A – Revenues – Rs 2000 cr.
– Company B – Revenues – Rs 1000 cr.

Present situation:
– An agreement has been made between A and B to merge their organizations in
one year .
– Company A is acquiring 51% stake in Company B
– Both are well established in their own markets
– Both have strong organization cultures and structures
– We had two rounds of discussions with both A and B executives

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Name of Participants- Group 6
Mergerspecialists.com

Neha Kiran Kamath Lakshminarayanan

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Vijayakumar Lalith Koushik Debnath

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Background and Context

Drivers for this merger

• Grow market share and attain a leadership position
• Access to new distribution channels, markets and products
• New capabilities, access to new technology/know-how and also
access to talent
• Operational synergies

Risks anticipated during and post merger integration

• Integration planning
• Integration execution

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Anticipated challenges

Creating focus during integration process

Delivering on expectations during post acquisition

Managing organizational cultures and getting people

issues right

Building transparency during the integration process

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Four key phases
Integration
planning Integration
execution

Change Project
Management Management

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

3 key considerations
Expected Synergies

Controlling the risks

Minimizing business disruptions

Integration Planning
Integration planning – Areas of Focus

1 Consolidation of operations, capacity

2 Leveraging combined purchases with

suppliers

3 Back office and Front office integration

4 Organizational Alignment

5 Operational Execution
Integration planning – Phase 1
Structuring teams

Central PMO team

Structuring the
integration
Major Functional teams
team • Finance and Accounting
• HR,
• Sales and Customer
Service
• Marketing,
• IT
• Operations
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Integration planning – contd..

• Integrating back office operations

• Complete integration – Ensure economics of scale and reduction in duplicate
layers
• Structuring integration plans
• Day 1 and 120 day plan
• Key components of Day 1 plan
• This is about planning various activities for successful day 1, post merger
• Addressing process gaps and systems functions during integration
• Key decisions to be made before closing
• Key components of a 120 day plan details
• Short term changes which affect immediate financial impact
• Migrating common policies and procedures
• Developing implementation approach
• Implementing organizational change – immediate and in phases

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Integration execution- Phase 2

Managing and controlling the risks

• Loss of customers/orders
• Day 1 communication to customers
• Key account volumes
• Monitoring and elevating customer complaints during first 120 days
• Active solicitation of feedback
• Deeper analysis of business impact in sales
• Business interruptions
• Integration of billing to avoid billing errors
• Task force for immediate post merger billing errors with analysis
• Shipment delays – safety stocks, nodes of disruptions in production
lines

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Integration execution….contd

Managing the risk of losing essential talent

• Proactive steps to retain talent
• Moving quickly to retain key talent in both the organizations
• Communication with key executives and managers
• Use retention bonuses or ESOPs
• Clear personnel decisions to pick winners and leave losers
• For critical posts, have a succession plan
• HR should have freedom to arrange one-to-one meetings
with senior executives for key resources
• Involve functional integration teams

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Project management- Phase 3

• Best practices for developing and maintaining integration

project plans
• Identifying and placing fully functional PM members along with central PMO teams
who has vast experience in Project Management.
• Follow a common project planning language
• Create a milestone timings and major actions
• Onetime costs – especially in IT systems
• Headcount impacts
• Project savings
• Approach
• Create a custom made format for this project based on functional teams formats
• Use of a PM software for effective project management
• Updating PM plan and the functional teams during the
entire 120 day plan with a weekly review
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Change Management- Phase 4

• Challenges in integration efforts

• Lack of “ future state vision”
• Lack of proper communication with a clear vision to the employees
• Not building a strategic communication and training programs for key
personnel
• Managers should be equipped with tools, processes and
training during the change management processes
• HR role in change management
• Prepare and involve HR teams well in the beginning of Integration
planning stages
• Identify and address potential “ people roadblocks” to success
• Monitoring the implementation process with measurable metrics for
change

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Change Management….contd

• Enabling employees
 Create employees awareness of the need for the change
 Answer unanswered questions or outstanding concerns
 Their willingness to participate in the change
 Train to understand the change, believe and adapt the changes
 Ensure proficiency
• Change management activities
 Assess readiness for change – current state
 Assess leadership capacity and stakeholder commitment
 Develop a change strategy to facilitate the change process
 Develop a clear communication strategy
 Increase individual and team capacity
 Assess culture and change alignment
 OD and performance management
 Impart necessary training to all the employees

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Why our methodology is
unique
• Completely process oriented
• Measurable strategy and tactics
• Common language across teams
• Defined timelines
• Transparency across teams

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

 April-2019
Proposal
Timelines for this project Presentation and
Approval

1st June 2019

Project
May 2019 – 30 days
Implementation-
Project documentation
Day 1

30th September
2019
Project closure and
Sign-off

July & Aug 2019

Project review and
corrections

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Project team

Lead Consultant

Finance
IT Consultant
consultant

Sales &
Operations Supply chain
Marketing
Consultant consultants
Consultants
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Pricing

Investments for this project:

– Lead Consultant – Rs 75000/day
– Functional Consultants – Rs 50000/day
– Documentation charges – Rs 1,50,000
– Support staff Charges – 5 members – Rs 25000/day
– Total # of man days planned : 125
– Total Costs : Rs 102,50,000 + GST
– All other travel expenses, lodging and boarding charges should be paid at
actuals
– Training charges would be based on Rs 75000 per day + GST

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Proposal assumptions

• Due diligence has been carried by both companies

• A fair value has been agreed for acquisition
• There is a security built over information sharing
• Enough resources are available
• Regulatory and Tax considerations are in place

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Out of Scope

1. Recruitment of human resources

2. Organization Design
3. IT Projects consolidation and implementation
4. Procurement of any software tools

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

 BITS Pilani
Pilani|Dubai|Goa|Hyderabad

Thank You

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