Setting and Achieving Clear Acquisition Expectations

How Platinum guided the post-merger integration process

Situation

A North American manufacturing division of a global firm acquired a key competitor’s largest underperforming division. The post-merger enterprise had five operating locations in Minnesota. The parent company, based in Europe, set clear expectations for integration into a single, Minnesota campus within a year, with revenue growth and significant improvement in operating performance measured by EBITDA.

Response

Platinum guided the post-merger integration process with aggressive timelines by working closely with managers from both sides of the new enterprise, collaborating with two other consulting resources and delivering on-site guidance. A two-phase process was mapped out over 11 months. An “Integration Design Team” of key managers from both companies was formed. Weekly meetings of the Design Team, facilitated by Platinum, focused on progress reports and problem-solving meetings. An interim financial manager was added to the team. In-depth analysis of manufacturing operations and operating margins identified a list of EBITDA improvement opportunities. A longterm vision, operating goals and priorities for the next year were set using a customized planning process that involved 35 managers from the United States and parent company in Europe.

Key information was communicated to all employees weekly. Exchange visits to different locations were scheduled. A common information system was defined, and the interim CFO was hired. Weekly Design Team meetings led to formation of a core leadership team, identification of integration priorities by location and functional area, and development of a move plan to a single campus. Specific teams were assigned to different aspects of improving EBITDA.

Results

A half year earlier than planned, an integrated company plan was being implemented by the new leadership team that reported to the CEO. Key functional areas were consolidated, minor layoffs were implemented early June, and an operating forecast showing achievement of EBITDA goals was accepted by the parent company. Revenues were better than initially forecast. The new leadership team is developing core values around a common culture. Progress is on schedule to move into a single campus in the next two years.

Download

Announcements

Subscribe to newsletters, announcements and updates from the Platinum Group.