Post Merger Integration Playbook – Group50 Consulting

Group50’s PMI playbook is a detailed set of initiatives and tasks that need to be completed for every integration. Group50 consultants can program manage and complete the entire integration process or complete parts of the process (i.e. GAAP Allocation of purchase consideration) if a company already has specialists or other outside firms doing this work. Each initiative and task is supported by a detailed checklist that will be monitored by a cloud based, real time reporting system. The PMI playbook should be started 30 days prior to close.

Strategy

Implementation Workshop

    TASK:

  • Integration kick-off work shop with executive leaders and integration team leaders
  • DESCRIPTION:

  • The Acquisition strategy defines the expected outcomes of the integration: Expected value creation, optimization of NEWCO’s operating model and market positioning.

Due Diligence Review

    TASK:

  • Identify due diligence findings that need to be addressed and create mitigation plans
  • DESCRIPTION:

  • Start with the findings of the due diligence process for planning purposes

Validate Integration Strategic Objectives

    TASK:

  • Review Acquisition Financial Model and define synergy goals
  • Complete a risk assessment
  • Define strategic objectives
  • Finalize Newco Strategies
  • DESCRIPTION:

  • The Acquisition strategy defines the operational and financial intent of the acquisition which directs all integration activities.

Identify Strategic and Operating Gaps

    TASK:

  • Develop process maps
  • Identify operational shortcomings – short-medium-long term
  • DESCRIPTION:

  • Newco’s future state will require addressing these gaps.

Implement PMO

    TASK:

  • Implement cloud based PMO system
  • Organize Integration Teams
  • Create Project Plans
  • DESCRIPTION:

  • Define integration budgetGroup50 uses a cloud based project management system that provides real time tracking and value creation for all cross functional and multi-level team integration teams.

Finance

    TASK:

  • Complete GAAP Allocation of Purchase Consideration to consolidate prior company closing financials into Day 1 Newco financials.
  • Using Newco organizational structure and operational similarities, develop financial structure of Newco Reporting Units, Subsidiaries and consolidations to allocate value of intellectual property, other intangible assets and Goodwill to the units where they are reflected.
  • Complete tax basis calculations for all purchased assets and set depreciation and amortization schedules
  • Define operating budgets and working capital requirements
  • Define integration budget
  • Identify and define financial liabilities
  • Set-up operating KPI’s and management dashboard
  • DESCRIPTION:

  • The financial structure and reporting systems need to be consolidated

Approve integration project plan

    TASK:

  • Acquire senior leadership approval and commitment
  • Implement PMO management software
  • Launch integration project

Legal

Contract Review

    TASK:

  • Review all contracts and optimize for NEWCO
  • DESCRIPTION:

  • NEWCO will have a different operating structure which requires consolidation of all contracts and insurance policies.

Legal Liability

    TASK:

  • Define legal risks and create risk mitigation strategies
  • Validate Regulatory Compliance – define and address gaps

Insurance

    TASK:

  • Review and consolidate all insurance policies
  • Identify cost reductions through consolidation

Trademarks and IP

    TASK:

  • Develop a list of trademarks and IP
  • Define maintenance program

Create Value

Newco future state design

    TASK:

  • Create an operating model
  • Create roadmap – current state to future state
  • Set goals and objectives for each functional area – Value creation, cost reductions, operating guidelines, etc.
  • Cascade objectives to all integration and project teams and manage performance through PMO system
  • DESCRIPTION:

  • Value creation is the fundamental reason for an acquisition and its integration

Maintain Business Performance

    TASK:

  • Set performance objectives during integration
  • Identify operating and organizational gaps that could impede performance
  • DESCRIPTION:

  • Integration can be a disruptive activity and the integration team needs to develop a plan to mitigate decreased performance during that period.

Process Reengineering

    TASK:

  • Identify overlapping processes
  • Complete a best practices inventory
  • Implement best practices from both companies into NEWCO
  • Redesign core business practices if required – Make part of the roadmap to the future state
  • DESCRIPTION:

  • Every company will have overlapping processes that need to be rationalized and has an inventory of best practices that should be leveraged in an integration.

Technology

Technology inventory and Enterprise Architecture

    TASK:

  • Identify all technologies utilized in both companies
  • Identify overlapping technologies
  • Define core technologies that will be utilized in NEWCO
  • Identify technology gaps
  • Create enterprise architecture and long term technology strategy
  • Identify cost reduction programs
  • DESCRIPTION:

  • Technology is the backbone of every business and the choices made during integration will have a long term impact on value creation

Leverage Existing Technologies

    TASK:

  • Identify areas where existing technology isn’t being fully utilized
  • Create leveraging plans and programs
  • Design business processes that more fully utilize technology capabilities
  • DESCRIPTION:

  • Every organization underutilizes their technology investment

Technology Risk

    TASK:

  • Create disaster recovery program
  • Identify cybersecurity risks and create mitigation plans
  • Evaluate technology interfaces for compliance to GDPR and other regulatory requirements
  • Validate scalability
  • DESCRIPTION:

  • As the backbone of the company, technology risk mitigation is a critical component of the integration plan.

Operations

Operating Strategy

    TASK:

  • Define operating strategy and its core elements
  • Define operational structure
  • Set-up a management review and reporting system
  • Implement operational cost reduction/takeout programs – operating costs, corporate overhead, etc.
  • Create operational dashboard with appropriate KPI’s
  • Complete a health and safety review
  • DESCRIPTION:

  • Every business needs an operating strategy that focuses on optimizing the performance of their supply chain. Every business has one – Quote to Cash and Raw materials to delivery of the final product or service to the end user.

Supply Chain

    TASK:

  • Evaluate supply chain performance for products and services
  • Identify overlapping supplies and create a consolidation strategy
  • Review supplier evaluations
  • Evaluate supply chain practices – purchasing, quality, performance, etc.
  • Create a supply chain footprint optimization program (suppliers, manufacturing, distribution, logistics, etc.)
  • Evaluate supply chain resiliency via a risk assessment
  • DESCRIPTION:

  • More detail is available in Group50’s Supply Chain Playbook

Manufacturing

    TASK:

  • Create a manufacturing strategy
  • Complete evaluation of footprint – optimization
  • Review utilization, efficiency and power alleys
  • Review and consolidate capital budgets
  • Review environmental surveys and create risk mitigation strategies
  • Complete a site/location optimization review

Quality

    TASK:

  • Quality Systems Evaluation and consolidation
  • Identify quality system weaknesses
  • Identify quality issues and address them

Marketing/Sales

Go To Market Plans

    TASK:

  • Evaluate customer base and create sales programs for each
  • Create marketing strategies
  • DESCRIPTION:

  • NEWCO will have marketing, sales, customer, product and distribution overlaps which will need to be rationalized and optimized

Product portfolios

    TASK:

  • Optimize product offerings and address product and service overlaps
  • Create or optimize brand strategies
  • Optimize pricing
  • Establish fix or exit programs for products and customers
  • DESCRIPTION:

  • Analysis of product and service overlaps defines the go forward product structure and identifies gaps which will become part of NEWCO’s new product roadmap

OMNI Channel

    TASK:

  • Create OMNI channel strategy
  • Evaluate all internet based systems and programs and consolidate/optimize
  • Customer Service review and consolidation
  • DESCRIPTION:

  • OMNI channel is defined by Group50 as “Any customer buying any product at anytime, anyway they want to”.

Sales strategy

    TASK:

  • Optimize sales and distribution channels
  • Optimize sales organization
  • Evaluate and optimize sales incentive programs
  • Consolidate pricing and rebate programs
  • Plan meetings with every customer to review the new sales strategy
  • DESCRIPTION:

  • Rationalization of sales, sales compensation and channels of distribution is important so that there is limited confusion in the marketplace

Organization

Cultural Assessment

    TASK:

  • Identify cultural barriers to integration
  • Create mitigation plan
  • DESCRIPTION:

  • Integrations require the combination of two cultures. Understanding the potential conflicts and addressing these issues prior to the start of integration is critical

Structure

    TASK:

  • Design organization structure required to operate NEWCO
  • Complete a staffing review for every function at every level: Compensation, Benefits, Bonuses, Contracts, Titles, Reporting, etc.

Personnel

    TASK:

  • Create a NEWCO onboarding program
  • Identify best performers in both organizations and departure risks
  • Create stay bonus program for critical integration resources
  • Identify integration team gaps and resource externally
  • Review WARN act requirements if required

Wages and benefits

    TASK:

  • Evaluate compensation to local markets
  • Develop a compensation program that supports the organization design
  • Consolidate benefits programs

Skills maps

    TASK:

  • Define skills requirements for NEWCO
  • Create critical skills maps and training programs to assess gaps

Communication

    TASK:

  • Develop a leadership communication plan during the integration
  • DESCRIPTION:

  • The need for frequent communication is under appreciated during an integration. It is imperative that leadership communicates status, progress and performance every week during the integration process

Change Management

    TASK:

  • Develop a change management program
  • DESCRIPTION:

  • Change management is a critical component of successfully integration two companies and cultures

Contact us

Jim Gitney

(909) 949-9083

Jim Gitney, the CEO of Group50® Consulting, has over 30 years of operational experience in companies ranging from start-ups to Fortune 50 in many industries. He brings a unique view of how business is structured, measured and improved. Jim has served as a Chairman, Board Member, CEO and worked many C-Level executive and operational roles including financial and operational turnarounds.

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