M&A Case Study - How to successfully project manage the final stages of an M&A deal
Many studies talk about how a remarkable number of acquisitions are not accretive, or fail to meet expectations. Reasons for this include a pre-close lack of planning and coordination between the buyer, the myriad of service providers that the buyer likely retains, and the local entities and offices that are either being acquired, or must be established.
One example - how can the buyer get needed international entities set up and ready for a carve out?
We’re not talking commercial, financial or legal due diligence, but rather getting the whole project up and running.
Here is an example of a case we worked on:
A Tier 1 private equity firm was in final negotiations to purchase a carve out from a major multinational, fast-moving consumer goods company. This cross-border carve out had over 2,500 employees in 20 countries spread across the EU, APAC and the Americas. The client had less than 120 days with which to close the transaction and have all of the entities setup and operationally ready for the deal to be able to close on time.
This situation by itself is complex with the scale and scope involved. But it was compounded by the fact that the different parties involved in the transaction – the integration consultants, corporate directors, accounting firms, payroll providers, and law firms - had not developed the needed documentation, roles & responsibilities, and meeting cadences between and across each of them in order to be efficient. They were not productively talking to each other, resulting in duplication of work, delays, and frustrations on the client front.
With a clear project plan, leader of the project management office, and meeting cadences that drive toward the desired timeline and result, many of these issues can be avoided.
Global carve-out projects need a single point of contact and accountability. That is what we do best at HSP Group! In global project managers like Danny Stevens, Sally So, Sky Mehringer and Jess Nunes on our team, we have the best experts in the world able to successfully take on even the most complex engagements of this type.
Here is how our PMO for international M&A carve-outs have previously been engaged:
We created a holistic overview and project plan outlining all the workstreams, stakeholders, timelines and deliverables. We act as an extension of the client, managing and liaising with the various parties involved in this process.
We created a flexible solution. Where possible, we helped quickly acquire shelf companies. Where shelf companies were not available, we helped setup the entities.
We created transparency and accountability. The client thought that certain service providers would do things like set up bank accounts (which require providing KYC documentation), payroll, or post-establishment registrations (corporate tax, business licenses, and indirect taxes). Those same service providers did not have these items in their scope of service, though. Our PMO created a document consolidation service across 24 countries that spelled out exactly what each corporate director needed to do on what timeframe.
We created a single point of contact and accountability (global project manager) supported by regional project managers.
We proactively scoped the downstream projects and timelines that we knew would arise in the next phase (like changing entity or dba names).
So what did we achieve on behalf of our client?
Closed a multi-billion dollar M&A carve-out on time.
Saved our client time and headaches.
Helped our client stay on track to achieve their desired ROI.