Client Situation
A specialized utility contractor with $40 million in annual revenue acquired a direct competitor that was a business unit of a major corporation. The acquired business was nearly 50 percent larger in both headcount and revenue than the acquiring company. The utility contractor needed to fully integrate the acquired business to realize all of the acquisition plan benefits, including an increased customer base to provide more revenue and operational efficiencies to improve profitability.Â
Solution
A E78, who was then COO of the acquired business, was tasked with leading the integration of the two businesses. First, he established a senior management team from both organizations to coordinate the integration and establish key milestones. Specialized teams focused on the ERP migration, inventory, payroll, and fleet management. The COO helped project teams stay focused on their tasks and deadlines, and re-evaluated priorities as unforeseen issues arose.
To achieve the operational savings defined in the acquisition plan, staff reductions were necessary. A key role of the COO was to develop a fair and unbiased process to assess multiple individuals for each position, ensure the process was being followed, and help affected employees obtain their full transition benefits.
The COO recognized that communications, both internal and external, would be vital during this time. He quickly established communications protocols for the two highest priority groups, employees, and customers. Employees across the country received regular email newsletters with acquisition updates and notifications of key dates. Each customer was contacted directly to discuss the impact of the acquisition and ensure each of them continued to receive high-quality support.
Results
Detailed, evolving, and flexible integration planning and execution enabled the combined entity to achieve the projected first-year revenue and profit targets. The organizational discipline developed during the integration also paid off in longer-range strategy execution.
- Operational efficiencies improved profit margins on long-term contracts
- The company won new contracts from existing and new customers
- The combined entity saved an annual $3 million in operating costs by carefully completing the staff reduction plan
- Key staff and field employees were pleased with the ongoing integration communications and the focus of senior management on the integration of company cultures
- The merged organization is now the market leader in its industry segment and continues to grow its core business
