A $1.5 billion business unit of a major global corporation was sold as part of a broad restructuring of the parent company. The buyer, another large corporation, was the winning bidder in an auction process and sought to expand its market position in a segment where it had traditionally been weak. The buyer performed extensive, highly detailed integration planning in advance of the closing to prepare, however, since the acquisition was nearly five times larger than the buyer’s existing similar business unit, successful execution of their plan was critical.
The CFO of the acquired unit, who is a E78 partner, was appointed to lead the integration due to his many years of experience in multiple functions of the business. He organized multiple teams and sub-teams under the framework of the integration plan, finalized the measurement metrics and timeline for each element of the plan, set up an on-going communications program and established the decision authority needed to ensure the process could proceed in a manageable way. In the early stages, in-depth progress reviews from each team were held weekly. Over time, by individual team these sessions moved to bi-weekly and then monthly as elements of the integration plan were successfully completed.
The detailed integration planning was crucial to keeping the entire organization focused on achieving well-defined goals and maintaining positive momentum for the combined business, leading to the following outcomes:
- Market share expanded and margins improved in excess of the planned amount due to improved operating efficiency
- G&A synergy cost savings of more than $35 million were realized
- The public markets responded favorably as the company’s stock price increased by a double-digit percentage by the end of the first full post-acquisition year