...Merger Integration: Delivering on the Promise A Series of Viewpoints on Mergers, Acquisitions, and Integration Executive Summary From airlines to automobiles to advertising, the urge to merge has escalated steadily over the past decade. In 2000 alone there were 9,472 merger and acquisition transactions in the United States — a new record. Although this rush to the altar may have been grounded in solid synergistic potential, all too many of these marriages quickly faltered. Booz •Allen & Hamilton recently conducted a study of deals that closed in 1997 and 1998 and discovered that 53 percent of the deals had failed to deliver their expected results. Although senior executives devote exhaustive hours to striking the right deal, it is merely the beginning of the long and tortuous merger integration process. In fact, structuring a deal is relatively easy; implementing one is nothing short of heroic. As an executive presiding over a newly merged company, you are inundated with competing priorities and demands. But the most important questions before you are these: • How do you deliver on the value you promised shareholders and investors while simultaneously “keeping the wheels on the business”? • In the wake of a merger, how do you successfully integrate operations while maintaining your focus on customers? Although no one-size-fits-all formula can apply to every company’s unique situation, in our experience four principles are the key to success in merger...
Words: 7242 - Pages: 29
...TRANSACTION SERVICES Doing Deals in Tough Times Best Practices of Leading M&A Teams ADVISORY Doing Deals in Tough Times 1 Tough Times Ahead Although 2007 was a record-setting year for global mergers and acquisitions (M&A), the current credit market suggests that conditions will become significantly more challenging for acquirers in the immediate future. Banks and other financial institutions have been particularly hard hit –analysts estimate that sub prime losses could reach $400 billion, and with their balance sheets in disarray, banks have not been eager to fund new transactions. Investor’s Business Daily estimates that sponsor deal volume will fall 30 percent in 2008 and strategic deals will fall 10 percent. Because of these conditions, lenders are now imposing tougher hurdles on dealmakers and forcing them to better articulate and justify their future expected cash flows. Of course, even in tough times companies will continue to make acquisitions. However, today’s difficult financial environment will put added pressure on companies to succeed. Companies that are fortunate enough to finance their deals will understand that they have a smaller margin of error. Managers who are relying on new synergies will find themselves racing against the clock to prove that their value proposition is real and to satisfy the terms being enforced by lenders. In addition, the softer economic times will further challenge acquirers to capture new revenue synergies...
Words: 8251 - Pages: 34
...Chapter 2: Global Outlook Will the next wave of m&a create more value? After the M&A activity slowdown of the early 2000s, the market is experiencing a new surge of mergers and acquisitions. It is largely known that in the past, two-thirds of M&A transactions have destroyed value, often resulting in abject failure. In this context, the key question today is: Will the new wave of M&A create more value than the previous one? Lessons from the past, we have tried to identify the reasons driving value creation and value destruction in M&A deals by analysing 2500 M&A transactions that took place over the past 10 years in Europe. Four lessons jump out of this study and from our experience. First, there is no statistical correlation between the value creation and the size of the transaction. However, large scale transactions (more than $1bn) tend to destroy value whereas small scale transactions (less than $50m) tend to create value. During 2004-2005 periods, for instance, small scale transactions in our sample have an average positive return after one year of 6 percent, compared to -5 percent for the large scale transactions. Furthermore, the average return weighted by transaction amount is below the average non-weighted return, which means that large scale transactions are obviously tending to destroy more value than small scale ones. In this respect, it is interesting to mentionthe existence of some country specificities regarding the average transaction...
Words: 7385 - Pages: 30
...Contents OBJECTIVE 2 SCOPE OF SERVICES 2 YOUR RESPONSIBILITIES 3 SOFTWARE COSTS AND PROFESSIONAL FEES 3 CLOSING 3 Yvonne M. Mason YRMT Tax Meridian, Idaho March 19, 2012 John Doe Meridian, Idaho Dear John Doe: As a long-time admirer of the outstanding work that your organization has done in the community, I particularly enjoyed having the opportunity to see how you function from the inside. This correspondence outlines the complete scope of work you requested, including objectives, procedures, identification of responsibilities, and estimated fees. OBJECTIVE Provide professional assistance to determine best-suited information system available to meet the business needs based on data input; processes to add, change, or delete data; outputs such as reports or data files that will be exported to another system. Discuss the benefits and drawbacks of chosen information system .Examine the long term benefits on new system including the real costs of distributed software development over centralized development. Install hardware and software requirements making sure configuration is correct and ensuring current network or system is compatible with system. Evaluate additional expenditures for support, maintenance, and training. Success of this project is dependent not only on the software, but also on your personnel's skill, effort, and willingness to work as a team. SCOPE OF SERVICES Procedures Gather information about business needs and determine best-suited...
Words: 1308 - Pages: 6
...retail approach based on physical locations is fast evolving into a multi-channel approach in order to provide increased convenience to the final consumer whilst taking advantage of the convergence of information technology. This multi-channel approach is also putting pressure on retailers to re-look at integrating the back office operations to provide seamless services and experience to their customers. In order to address the details of task required for the assignment, the report is organized as follows; Part A: section 1) Applying a standard approach of Structured Systems Analysis and Design to understand the case of Heelz and determine the appropriate solution; section 2); future considerations for Heelz and applying Strategic Systems Integration Planning, Section 3) Conclude by providing a summary of the critical aspect of the change Sally needs to consider as Heelz embarks on this journey. Part B section 4); A reflective summary drawing from the contribution of my class mates on the online forum for Units 4,5 and 6 – with specific reference to Open Source software and section 5); lists the references. Table of Contents: Abstract: 2 Table of Contents: 3 Part...
Words: 2697 - Pages: 11
...Finance After a Merger 2 When two companies merge, integrating their Finance functions is a major imperative. Variations in financial standards and procedures can prevent the merged entity’s Finance function from effective daily operations, impacting both internal and external stakeholders. Integration of this key function is also time-sensitive: the entity’s leaders, not to mention investors, demand consolidated financial statements, earnings and projections as soon as possible. Additionally, a majority of the potential gains from a merger cannot be achieved without committed support from Finance. Many companies recognize this challenge and give substantial attention to financial integration soon after announcing the deal. However, this urgency creates its own problems. Under time pressure, finance professionals will feel rushed to combine disparate numbers and harmonize divergent processes. If they do not yet have a clear vision of the new company’s future state, they may implement manual temporary work-arounds, such as preparing manual reconciliations of customer accounts, that require incremental work effort, cost and risk to Finance. By focusing only on interim integration work and not considering the future state in parallel, many companies risk that the manual interim state will one day become the future state. Maintaining disparate and manually integrated systems limits opportunity for future standardization and cost reduction, thereby preventing promised synergy...
Words: 3161 - Pages: 13
...Lovely Professional University Case study on student record keeping system Name Abhishek Bhatt Regd. No. 11109390 Roll No. A21 Section K1104 Submittked By Submitted to Abhishek Bhatt Vipin Kumar Case Study case study on student record keeping system Table Of Content 1) Introduction 2) What is DBMS ? 3) Features/Advantages of DBMS. 4)Disadvantages of DBMS 5)Advantages of student record keeping system 6)Note * Introduction : * DBMS : DBMS Stands for Data Base Management System. It consists of interrelated data and set of programs to access those data. * Data : Raw information is called data. * Database : Database is a collection of interrelated data, contain information about one particular enterprise. * Interrelated Data : It is a type of data which is related to each other. e.g. Student and subject, parents and child. * About My Topic : My topic is about case study on student record keeping system * Introduction to case student record keeping system Student Record Keeping System is a comprehensive solution for all of a school’s student management needs, like enrollment...
Words: 1384 - Pages: 6
...how the process works. Hopefully this short course will provide you with a better appreciation of what is involved. You might be asking yourself, why do I need to learn the merger and acquisition (M & A) process? Well for starters, mergers and acquisitions are now a normal way of life within the business world. In today's global, competitive environment, mergers are sometimes the only means for long-term survival. In other cases, such as Cisco Systems, mergers are a strategic component for generating long-term growth. Additionally, many entrepreneurs no longer build companies for the long-term; they build companies for the short-term, hoping to sell the company for huge profits. In her book The Art of Merger and Acquisition Integration, Alexandra Reed Lajoux puts it best: Virtually every major company in the United States today has experienced a major acquisition at some point in history. And at any given time, thousands of these...
Words: 8892 - Pages: 36
...times. A merger of the size like HP-Compaq has implications for the workforce of these companies across the globe. Although the merging entities give a great deal of importance to financial matters and the outcomes, HR issues are the most neglected ones. Ironically studies show that most of the mergers fail to bring out the desired outcomes due to people related issues. The uncertainty brought out by poorly managed HR issues in mergers and acquisitions have been the major reason for these failures. The human resource issues in the mergers and acquisitions (M&A) can be classified in two phases the pre-merger phase and the post merger phase. Literature provides ample evidence of difference in between the human resource activities in the two stages: the pre-acquisition and post acquisition period. Due diligence is important in the first phase while integration issues take the front seat in the later. The pre acquisition period involves an assessment of the cultural and organizational differences, which will include the organizational cultures, role of leaders in the organization, life cycle of the organization, and the management styles. The mergers often prove to be traumatic for the employees of acquired firms; the impact can range from anger to depression. The usual impact is high turnover, decrease in the morale, motivation, productivity leading to merger failure. The other issues in the M&A activity are the changes in the HR policies, downsizing, layoffs, survivor syndromes...
Words: 3465 - Pages: 14
...recent times. A merger of the size like HP-Compaq has implications for the workforce of these companies across the globe. Although the merging entities give a great deal of importance to financial matters and the outcomes, HR issues are the most neglected ones. Ironically studies show that most of the mergers fail to bring out the desired outcomes due to people related issues. The uncertainty brought out by poorly managed HR issues in mergers and acquisitions have been the major reason for these failures. The human resource issues in the mergers and acquisitions (M&A) can be classified in two phases the pre-merger phase and the post merger phase. Literature provides ample evidence of difference in between the human resource activities in the two stages: the pre-acquisition and post acquisition period. Due diligence is important in the first phase while integration issues take the front seat in the later. The pre acquisition period involves an assessment of the cultural and organizational differences, which will include the organizational cultures, role of leaders in the organization, life cycle of the organization, and the management styles. The mergers often prove to be traumatic for the employees of acquired firms; the impact can range from anger to depression. The usual impact is high turnover, decrease in the morale, motivation, productivity leading to merger failure. The other issues in the M&A activity are the changes in the HR policies, downsizing, layoffs, survivor syndromes...
Words: 3465 - Pages: 14
...case, which shows the rationale and business justification for this project. This is a process-based technique where the structure includes 5 phases as well as 8 high level processes. One of the merits of PRINCE 2, is that it can be applied to any size of set up or any type of project. One of the key shortcomings of PRINCE 2 is that it does not provide and cover for any support of the project of project procurement management and human resource management. PRINCE2 is arranged into eight processes as shown below: 1. Starting Up a Project (SU) 2. Planning (PL) 3. Initiating a Project (IP) 4. Directing a Project (DP) 5. Controlling a Stage (CS) 6. Managing Product Delivery (MP) 7. Managing Stage Boundaries (SB) 8. Closing a Project (CP) ITIL Integration In...
Words: 4374 - Pages: 18
...is involved. You might be asking yourself, why do I need to learn the merger and acquisition (M & A) process? Well for starters, mergers and acquisitions are now a normal way of life within the business world. In today's global, competitive environment, mergers are sometimes the only means for long-term survival. In other cases, such as Cisco Systems, mergers are a strategic component for generating long-term growth. Additionally, many entrepreneurs no longer build companies for the long-term; they build companies for the short-term, hoping to sell the company for huge profits. In her book The Art of Merger and Acquisition Integration, Alexandra Reed Lajoux puts it best: Virtually every major company in the United States today has experienced a major acquisition at some point in history. And at any given time, thousands of these companies are adjusting to post-merger reality. For example, so far in the decade of the 1990's (through June 1997), 96,020 companies have come under new ownership worldwide in deals worth a total of $ 3.9 trillion - and that's just counting acquisitions valued at $ 5 million and over. Add to this the many smaller companies and nonprofit and governmental entities that experience mergers every year, and the M & A universe becomes large indeed. M & A Defined When we use the term "merger", we are referring to the merging of two companies where one new company will continue to...
Words: 7842 - Pages: 32
...Critical Success Factors for ERP implementation: The Critical Success Factors (CSF) in implementing an ERP system, that enables the Organisation or an Industry has been very challenging; in terms of integrating all the business processes within the Industry, to stay competitive and ahead of other players in the market. In order to increase efficiency and improve productivity the successful implementation of the ERP system would pave way for faster productivity and competitive advantage. Generally, ERP can be defined as enterprise wide IS (Information System) that amalgamates and controls all of the business processes in the organisation intact. According to Nah and Lau (2001) ERP is “a packaged business software system that enables a company to manage the efficient and effective (materials, human resources, finance etc.,) by providing a total, integrated solution for the organisation’s information-processing needs”. If ERP is implemented proper and efficient, the flow of information across the organisation is integrated into single common database. This allows easy and immediate access to information regarding inventory, product or customer data, and prior history information (Shehab et al., 2004). The CSF can also be influenced by the best practices adopted by the organisation. Please see the diagram below for success factor category deriving best practices. The main facets discussed below are the most prominent in the organisation for best implementation practices: Strategic Goals: ...
Words: 2095 - Pages: 9
...Mergers and Acquisitions Basics Mergers and Acquisitions Basics All You Need To Know Donald DePamphilis Amsterdam • Boston • Heidelberg • London New York • Oxford • Paris • San Diego San Francisco • Singapore • Sydney • Tokyo Academic Press is an imprint of Elsevier Academic Press is an imprint of Elsevier 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA Elsevier, The Boulevard, Langford Lane, Kidlington, Oxford, OX5 1GB, UK Copyright © 2011 Elsevier Inc. All rights reserved No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without permission in writing from the publisher. Details on how to seek permission, further information about the Publisher’s permissions policies and our arrangements with organizations such as the Copyright Clearance Center and the Copyright Licensing Agency, can be found at our website: www.elsevier.com/permissions. This book and the individual contributions contained in it are protected under copyright by the Publisher (other than as may be noted herein). Notices Knowledge and best practice in this field are constantly changing. As new research and experience broaden our understanding, changes in research methods, professional practices, or medical treatment may become necessary. Practitioners and researchers must always rely on their own experience and knowledge...
Words: 105288 - Pages: 422
...|Merger and Acquisition | INDEX |S.NO |Contents |Page No. | |1 |Abstract |3 | |2 |Introduction |4 | |3 |Types of Mergers |4 | |4 |Reasons for Mergers and Acquisition |5 | |5 |Advantages of Mergers and Acquisition |7 | |6 |Failure of Mergers and Acquisition |10 | |7 | Making it Happen |13 | |8 |Conclusion |14 | |9 |Bibliography |15 | Abstract: As a corporate strategy, Mergers and Acquisition have been used to expand size and growth of business. In this report this corporate strategy is investigated...
Words: 3833 - Pages: 16
