|Post Merger Integration Support
The problem: A newly funded portfolio company of a venture capital firm was about to make its
first acquisition. The VC firm and the company management were very comfortable with their
target selection and price, but they did not have a great deal of experience in actual intregration.
What we did: We helped the acquiring company review their prepared approach, identified
potential gaps, and made recommendations for optimizing the process. Once the deal was
closed, we provided advice to the integration manager and the functional team leaders as they
implemented the integration plans.
The end result: The client received targeted support on critical integration issues, received
access to best practices, and avoided a few hidden pitfalls. We were also able to provide advice
on additional issues that came up during the merger. Our approach allowed the client to
maintain full control and leadership of the integration while having the benefit of our expertise.
Using the 'pay as you go, ' as-needed fee structure, the client was able to get critical support at
a fraction of what a typical project based consultant would have charged.
Acquisition Target Review
The problem: A business unit head had charged a team to evaluate a large potential M&A
transaction. The team came back in support of the deal, having identified numerous potential
acquisition synergies. The BU head invited us to sit in on the presentation which summarized
their findings, and asked for our point of view. Normally this is a role that most merger
consultants would not want: if they support the recommendations, they feel like a rubber stamp,
and are concerned that the work will appear to have their approval even though they did not do
it, did not quality check it, and did not get paid for it. If they don't support the recommendations,
it might appear that they did so in order to get a consulting project for themselves.
What we did: At the end of the presentation, we told the team we had a number of questions.
For each question, we asked the team whether they agreed if the question was important to
understanding the value of the deal (they agreed almost all of them were). Then we asked
which ones they had answers to. For most, they did not -- and agreed that they did not. As a
result they came to the realization that they still needed to do some work. In the meeting, we
outlined a number of sample analytics that could resolve the issues. Over the next month, the
team completed the work (with some limited ongoing support from us, mostly in the form of
helping them structure the analysis) and came to the conclusion that many of the expected
synergies would not be realized, and thus the deal was not a good one, not only at the price they
were contemplating paying, but at almost any price.
The end result: The team felt good about their conclusions, since they had made them, and
were not 'told' that they were wrong. (Later, the company they were considering buying went
bankrupt as the key technology did not prove economically viable). All this was accomplished
without the need to bring in an outside team of merger consultants.
Small retailer turnaround
The problem: A family owned retailer was struggling, having lost money for 7 straight years,
surviving only through loans received from a friend of the family. They also feared the opening
of a Wal-Mart close to their main store, and wondered if they could find new ways to compete.
What we did: We were engaged to help determine whether an online storefront would be
beneficial, and to generally advise the Board. In the very first Board meeting, just a few weeks
after we were brought in, we were shown the current financials. We uncovered a major problem:
the current cash situation was untenable, and the company would run out of cash in less than 2
months. Our role was immediately changed to help with a turnaround. Our professional took
defacto control of the retail operations, and in less than 6 weeks, using a series of simple, easily
understood operating models, changed the way the business was being run by the store
managers. The owners supported the new approach with management and incentive changes.
The end result: Given their cash crunch, we mutually agreed on a fee structure that was
performance based, and where we shared in the incremental margins from new business. The
net result was that the company not only avoided the financial collapse, but within a year turned
profitable and has grown dramatically since then.
The problem: A multinational plastics company needed to update their 5 year strategy. They
had prepared the previous strategy with the help of a large consulting firm, and while they were
pleased with the results of that project, did not want to invest the $1+ million required to hire
them again. In addition, they wanted their own management team to take the lead on the effort
to ensure ownership and buy in. Being a global firm, they wanted any outside business advisors
to be comfortable working with different cultures and in different countries.
What we did: One of our senior professionals worked with the CEO and the senior
management team to prioritize the key issues and the scope of the strategic update. A global
strategy team was assigned, and our professional was added as an outside advisor to the team.
We helped the team develop the project workplan, aided in prioritizing the key issues, suggested
analyses and frameworks to resolve the key issues, provided best practices from other
industries, and helped codify the results and conclusions for the Board. Since all of the team
members were performing their normal line duties, our role also included making sure that
assigned tasks were completed on time and in a manner that would lead to efficient team
meetings, which were held by conference call and in person once a month. We also served as a
personal advisor to certain members of the team and the divisional president, who was not part
of the team.
The end result: A new strategy that was totally 'owned' by the management team who would be
responsible for implementing it, at a fraction of the cost of a traditional consulting firm. The
divisional manager and CEO were also able to get ongoing advice and support long after the
strategy was complete without needing to conduct another consulting project.
High Tech Startup
The problem: Two PhD's wanted to leave their large technology company and start their own
business. Though they had run successful business units within their corporation, they had little
experience in a startup: developing a value proposition, scoping the business, writing a
business plan, raising money, deciding on ownership structure, etc.
What we did: We worked with them as they developed their business proposition, and then
helped create the business plan after advising them on all the associated decisions (ownership,
management, strategy). We helped prepare proformas, advised on who to approach for venture
funds, and assisted in the presentations.
The end result: The end result was a successful company startup after an initial fundraising of
several million dollars, followed by subsequent tranches of capital.