Pegasus - Acquisition


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  • (core competency)Flat and efficient organisation structure.. Strong sense of Teamwork & learningHigh Quality skilled technical employeesRelatively low level of employee engagement Little standardization of operating practices Low employee engagement Strong Financials & Cost Management
  • Increase scale & service range of operations (enhance market share and revenue)Taking over the competence and value set of the executive team in call up
  • Degree of integration
  • Engagement of Employees: Encourage team work and knowledge sharing, including best practices sharing Loyalty transfers: Incentive packages for key employeesReduction of supervisory and management staff relative to hourly employees in acquired call centers Lower OH: Restructuring organization to decentralize functional staff in IT and Human resources onto the operating locationsProvide the Masseys with appropriate consulting/advisory roles within area of expertiseEliminate duplicate positions and provide appropriate severance packages for senior employees
  • So we will now move on to talk about the key risks associated with the acquisition and what actions can be taken to mitigate these risksOne key risk is a drop in employee morale and erosion of positive working culture due to poor cultural fit. This could be amplified by employee concern over job security and unequal compensation. The best way to mitigate these risks is to carry out an assessment of the similarities and differences between the cultures in the two companies and formulate specific integrative plans accordingly, as well as initiating communication with Call-Up’s employees as soon as possible.Another significant risk is that Call-Up’s rivals can exploitation of the transition phase at Call-Up as it attempts to negotiate contracts with its current customers at higher rates with little improvement in efficiency and service levels. An mitigating action in response to this would be to reassure key clients of their immediate plans and proceed quickly with operational improvementsAnother potential pitfall is the loss of business momentum at Pegasus itself as key staff lose focus during the time of acquisition. Pegasus can reduce the risk of this happening by hiring an external consultant to support the Chief Operating Officer as she spearheads the integration process so she remains in control of existing operations.The final major risk is that profitability will fall in the longer term.In order to prevent this we suggest the early transfer of Pegasus’ operating practices and replication of hiring and training policy in the newly acquired units.
  • Pegasus - Acquisition

    1. 1. Pegasus Case<br />Team 417: Monarch Group<br />
    2. 2.
    3. 3. Agenda<br />Introduction<br />Size-up and Strategic Fit<br />Value created by the acquisition<br />Main challenges<br />First 90 days<br />Then 100 days<br />Organization Structure<br />Risks <br />Strategy of new Pegasus<br />Conclusion<br />
    4. 4. The Situation<br /><ul><li>Pegasus: a strong provider of specialized call center services
    5. 5. Call-up: a rival in financial trouble
    6. 6. The opportunity: an opportunity to fully absorb a large competitor</li></li></ul><li>Introduction<br />Search and Screen (on-going)<br />Define strategic fit and financing intent<br />Evaluate and negotiate<br />Operateand capture value<br />Developintegrationplan<br />Integrate<br />DueDiligence<br />
    7. 7. Size up & Strategic Fit<br />Create Value<br />
    8. 8. How will Call-Up’s acquisition and absorption create value for Pegasus?<br />Evaluation and size-up competence<br />Highly successful & lean operations <br />Identification expertise <br />Opportunity driven culture<br />Integration knowledge & experience <br />Enhance market share as well as break into new markets <br />Achieve cost synergies (lower unit costs)<br />Addition of talent management & highly skilled employees<br />Elimination of a competitor<br />Attain additional infrastructure (call centres)<br />
    9. 9. Potential Challenges <br /><ul><li>Speed of integration
    10. 10. Culture change
    11. 11. Raise Call-Up’s operations to Pegasus’ standards
    12. 12. Immediate cost savings
    13. 13. Retain key call-up employees
    14. 14. Avoid loss of key customers</li></ul>Mike<br />Pat<br />
    15. 15. ACQUIRED<br />
    16. 16. First 90 Days prior to complete takeover<br />Executive Decisions<br />“Due Diligence”<br />Create shared sense of vision<br />Hire an outside Consultant and set up “Go Team”<br />Substantive Actions<br />Develop stakeholder communications:<br />Employee & Customers<br />Development of Strategic, Integration and Operational Plans<br />HR Decisions: Executive and Staff; Incentive packages for key employees<br />Main Enablers and Resistance Sources<br />Identification of human flywheels<br />Identification of sources of resistance<br />
    17. 17. First 100 Days after complete takeover<br />Operations<br />Focus on current customers<br />Rationalization of service lines and resources<br />Focus on key clients in Call-up<br />Finances<br />Lower Overhead cost<br />Decrease unprofitable accounts<br />Reduce accounts receivable policy at Call-Up<br />HR Changes<br />Increase bandwidth of supervisors of Call-Up<br />Homogenized compensation package<br />Loyalty transfers of key employees to Pegasus<br />Massey’s advisory role<br />Realignment of leadership<br />Address Regional VP concern<br />
    18. 18. Organizational structure<br />Advisor<br /> Lionel Massey<br /> Advisor<br />Paula Massey<br />President and CEO<br />Allan Small<br />Vice President<br />HR<br />Lloyd James<br />Vice President<br />Operations<br />Mary Pratt<br />Vice President Projects and Acquisitions<br />Michel Lemaire<br />Vice President<br />Sales and Marketing – Technology<br />Anwar Mahdi<br />Vice President Sales and Marketing – General<br />Sheila Hancock<br />Vice President IT<br />Charles Wong<br />Vice President Finance<br />James Salter<br />Call-Up Operations<br />Pegasus Operations<br />Regional Manager<br />Markham<br />Colin Bower<br />Regional Manager<br />Newmarket<br />(to be announced)<br />Regional Manager<br />Hamilton<br />Kent Jones<br />Regional Manager<br />Dartmouth<br />Ernie Gallo<br />Regional Manager<br />Halifax Centre<br />Joe Richards<br />Regional Manager<br />Moncton Centre<br />Corinne May<br />Regional Manager<br />Moncton North<br />(to be announced)<br />
    19. 19.
    20. 20. Strategy for the new Pegasus<br />“Our mission is to expand our customer base through continued excellent customer service and through a pricing strategy that maximizes our profit margins.”<br />
    21. 21. Questions?<br />
    22. 22. Forecast Financial impact<br />