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The IT Playbook for Seamless M&A Events

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The IT Playbook for Seamless M&A Events

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Careful and comprehensive IT planning is vital for a successful M&A. Here is how the IT element of an M&A event increases value, minimizes costs, and creates synergies for all involved.

Careful and comprehensive IT planning is vital for a successful M&A. Here is how the IT element of an M&A event increases value, minimizes costs, and creates synergies for all involved.

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The IT Playbook for Seamless M&A Events

  1. 1. The  IT  Playbook  for   Seamless  M&A  Events
  2. 2. The  Role  of  IT  in  M&A  Events 2 Sound  Familiar? After  an  M&A  event…
  3. 3. The  Role  of  IT  in  M&A  Events 3 Sound  Familiar? Promised  IT  synergies have  not  materialized After  an  M&A  event…
  4. 4. The  Role  of  IT  in  M&A  Events 4 Sound  Familiar? Promised  IT  synergies have  not  materialized Expert  IT  resources have  left,  creating  risk  and  disruptions After  an  M&A  event…
  5. 5. The  Role  of  IT  in  M&A  Events 5 Sound  Familiar? Promised  IT  synergies have  not  materialized Expert  IT  resources have  left,  creating  risk  and  disruptions Software  licensing  issues  lead  to  unmet  business  solution  needs After  an  M&A  event…
  6. 6. The  Role  of  IT  in  M&A  Events 6 Sound  Familiar? Promised  IT  synergies have  not  materialized Expert  IT  resources have  left,  creating  risk  and  disruptions Software  licensing  issues  lead  to  unmet  business  solution  needs Integration of  enterprise  systems  has  failed,  putting  business   processes  at  risk After  an  M&A  event…
  7. 7. The  Role  of  IT  in  M&A  Events 7 Sound  Familiar? Promised  IT  synergies have  not  materialized Expert  IT  resources have  left,  creating  risk  and  disruptions Software  licensing  issues  lead  to  unmet  business  solution  needs Integration of  enterprise  systems  has  failed,  putting  business   processes  at  risk Understanding  of  post-­‐transition  IT support  and  operations   expectations  have  been  unclear,  creating  risk  of  disruptions After  an  M&A  event…
  8. 8. The  Role  of  IT  in  M&A  Events 8 Why  IT  Planning  Is  Vital to  a  Successful  M&A
  9. 9. The  Role  of  IT  in  M&A  Events 9 The  Value  of  IT  in  M&As The  level  of  value  in  mergers,  acquisitions   and  divestitures  is  primarily  driven  by   a  successful IT  transition.
  10. 10. The  Role  of  IT  in  M&A  Events 10 The  Value  of  IT  in  M&As:  So  What? By  beginning  the  M&A  process  with  a  detailed  IT  execution  plan,   transparency is  gained,  which  can  be  leveraged  during   negotiations  and  lead  to  substantial  transaction  cost  savings.
  11. 11. The  Role  of  IT  in  M&A  Events 11 The  Cost  of  IT  in  M&As IT  is  typically  the  largest  cost  element   in  an  M&A  event  – and  can  be  the   single  biggest  enabler  of  synergies.
  12. 12. The  Role  of  IT  in  M&A  Events 12 The  Cost  of  IT  in  M&As:  So  What? Proper  IT  planning  mitigates  M&A  risk.  Since  IT  cost  is  the   highest  cost  within  M&A  events,  first  time  quality  should  be   achieved  to  avoid  the  substantial  and  damaging  cost  of  failure.  
  13. 13. The  Role  of  IT  in  M&A  Events 13 IT  Synergies  in  M&As Getting  IT  involved  early  and  often  throughout  the  M&A   lifecycle  can  be  critical  for  effective  execution  and realization  of  benefits  from  a  merger,  acquisition,  or  divestiture.  
  14. 14. The  Role  of  IT  in  M&A  Events 14 IT  Synergies  in  M&As:  So  What? The  realization  of  synergies  and  the  End-­‐State  Blueprint  avoids undelivered  promises  and  delayed  transitions.  Additionally,  a   proactively  negotiated  TSA  can  accelerate  the  negotiation   process  and  create  a  smoother  transition.  
  15. 15. The  Role  of  IT  in  M&A  Events 15 How  to  Maximize  IT  Outcomes   During  an  M&A  Event
  16. 16. The  Role  of  IT  in  M&A  Events 16 The  M&A  Lifecycle The  6-­‐stage  M&A  Lifecycle,  when  properly   executed,  is  a  game  changer  for  reducing  the  risk  of   failure  and  unforeseen  costs  from  your  M&A  event. Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  17. 17. The  Role  of  IT  in  M&A  Events 17 Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution Stage  1:  Screening
  18. 18. The  Role  of  IT  in  M&A  Events 18 Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution Stage  1:  Screening Events Approach Deliverables IT  Advisory Provide  IT  advice   to  the  core  M&A   team M&A  Readiness Assessment
  19. 19. The  Role  of  IT  in  M&A  Events 19 Stage  2:  Initial  Evaluation Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  20. 20. The  Role  of  IT  in  M&A  Events 20 Stage  2:  Initial  Evaluation Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution Events Approach Deliverables IT  Cost IT  Subject  Matter   Expert  (SME)   works  with  M&A   team  to  prepare   for  event • IT  Cost  Analysis • Due  Diligence   Preparation  Plan • Synergies  Plan • Risk  Analysis
  21. 21. The  Role  of  IT  in  M&A  Events 21 Milestone  I:  Letter  of  Intent  Signed Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution MILESTONE  I Letter  of  Intent  Signed Period  of  exclusivity;  due   diligence  initiated.
  22. 22. The  Role  of  IT  in  M&A  Events 22 Stage  3:  Detailed  Evaluation Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  23. 23. The  Role  of  IT  in  M&A  Events 23 Stage  3:  Detailed  Evaluation Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution Events Approach Deliverables IT  Due  Diligence Perform  detailed   Due  Diligence  on   all  aspects  of  IT   within  the  entity,   and  the  IT   organization • Due  Diligence   Worksheets • Transition  Planning • Staff  Retention  Plan • Current-­‐ &  Future-­‐ State  Blueprint
  24. 24. The  Role  of  IT  in  M&A  Events 24 Pre-­‐Close  Findings By  Stage  3  your  organization  will  have  addressed  the  following  aspects: Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  25. 25. The  Role  of  IT  in  M&A  Events 25 Pre-­‐Close  Findings Risks:  Understand  and  expose  potential  risks  that  may  threaten   financial  and  operational  success;  use  metrics  to  monitor  project  risks By  Stage  3  your  organization  will  have  addressed  the  following  aspects: Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  26. 26. The  Role  of  IT  in  M&A  Events 26 Pre-­‐Close  Findings Risks:  Understand  and  expose  potential  risks  that  may  threaten   financial  and  operational  success;  use  metrics  to  monitor  project  risks Gap  Analysis:  Understand  the  magnitude  of  the  integration  or   separation  effort By  Stage  3  your  organization  will  have  addressed  the  following  aspects: Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  27. 27. The  Role  of  IT  in  M&A  Events 27 Pre-­‐Close  Findings Risks:  Understand  and  expose  potential  risks  that  may  threaten   financial  and  operational  success;  use  metrics  to  monitor  project  risks Gap  Analysis:  Understand  the  magnitude  of  the  integration  or   separation  effort Synergies:  Determine  opportunities  for  synergy  and  set  goals By  Stage  3  your  organization  will  have  addressed  the  following  aspects: Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  28. 28. The  Role  of  IT  in  M&A  Events 28 Pre-­‐Close  Findings Risks:  Understand  and  expose  potential  risks  that  may  threaten   financial  and  operational  success;  use  metrics  to  monitor  project  risks Gap  Analysis:  Understand  the  magnitude  of  the  integration  or   separation  effort Synergies:  Determine  opportunities  for  synergy  and  set  goals Due  Diligence:  Understand  target  assets,  liabilities,  and  capabilities   through  comprehensive  evaluations By  Stage  3  your  organization  will  have  addressed  the  following  aspects: Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  29. 29. The  Role  of  IT  in  M&A  Events 29 Pre-­‐Close  Findings Risks:  Understand  and  expose  potential  risks  that  may  threaten   financial  and  operational  success;  use  metrics  to  monitor  project  risks Gap  Analysis:  Understand  the  magnitude  of  the  integration  or   separation  effort Synergies:  Determine  opportunities  for  synergy  and  set  goals Due  Diligence:  Understand  target  assets,  liabilities,  and  capabilities   through  comprehensive  evaluations Integration  or  Separation  Planning:  Day  1  and  Future-­‐State   Blueprinting;  validate  model(s)  to  be  used By  Stage  3  your  organization  will  have  addressed  the  following  aspects: Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  30. 30. The  Role  of  IT  in  M&A  Events 30 Milestone  II:  Deal  Signed  &  Announced Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution MILESTONE  II  (DAY  0) Deal  Signed  &  Announced   Obtain  regulatory  &   shareholder  approvals;   integration/separation   planning  initiated.
  31. 31. The  Role  of  IT  in  M&A  Events 31 Stage  4:  Closing Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  32. 32. The  Role  of  IT  in  M&A  Events 32 Stage  4:  Closing Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution Events Approach Deliverables Due  Diligence   Finalization Transition  Services   Agreement Refine  the  Due   Diligence   findings,  TSA   terms,  transition   plans  for  closing • Transition  Services   Agreement  (TSA) • Detailed  Transition   Plan
  33. 33. The  Role  of  IT  in  M&A  Events 33 Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution Milestone  III:  Deal  Closed MILESTONE  III  (DAY  1) Deal  Closed Financial  close  of  the   transaction,   integration/separation   execution.
  34. 34. The  Role  of  IT  in  M&A  Events 34 Stage  5:  Execution Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  35. 35. The  Role  of  IT  in  M&A  Events 35 Stage  5:  Execution Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution Events Approach Deliverables Project   Management IT  Blueprint  Design   Execution IT  TSA  Execution  &   Exit  Management Utilize  project   management  and   change   management  to   drive  a  successful   transition • Transition  Status   Reports • TSA  Execution  and   Exit  Management   Report • IT  Blueprint  Design   Execution  Report
  36. 36. The  Role  of  IT  in  M&A  Events 36 Stage  6:  Operational  Review Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution
  37. 37. The  Role  of  IT  in  M&A  Events 37 Stage  6:  Operational  Review Screening Initial   Evaluation Detailed   Evaluation Operational   ReviewClosing Execution Events Approach Deliverables Synergies Pursue  synergies  early,   with  an  expectation  of   synergy  realization   within  the  first   operational  phase   (first  year) • Synergy  Tracking  &   Management  Report
  38. 38. The  Role  of  IT  in  M&A  Events 38 How  to  Leverage  the  IT  Organization Engage  trusted  senior  IT  leader during   screening  activities  to  provide  IT  Advisory   to  the  core  M&A  Team
  39. 39. The  Role  of  IT  in  M&A  Events 39 How  to  Leverage  the  IT  Organization Engage  trusted  senior  IT  leader during   screening  activities  to  provide  IT  Advisory   to  the  core  M&A  Team Assign  a  senior  IT  leader  (and  IT   infrastructure  leader)  to  the  M&A  Event   Team  during  the  Initial  Evaluation,  Stage  2
  40. 40. The  Role  of  IT  in  M&A  Events 40 Outcomes
  41. 41. The  Role  of  IT  in  M&A  Events 41 How  M&A  Events  Benefit  from   Active  IT  Support   Transition  IT  On-­‐Time  &  On-­‐Budget Execute  Successfully  from  Day  One Execute  TSA  Effectively Exit  TSA  Early   Achieve  Synergies Realize  Future  State  Blueprint  
  42. 42. The  Role  of  IT  in  M&A  Events 42 Acknowledgements If  you  are  a  novice  in  IT  M&A,   we  recommend  the  ultimate   reference  book: M&A  Information   Technology  Best   Practices  by  Janice   M.  Roehl-­‐Anderson Accenture ARMA  International CIO  Journal Crowe  Horwath Deloitte Forrester Gartner McKinsey PWC
  43. 43. The  Role  of  IT  in  M&A  Events 43 Wes  Hopmans:   linkedin.com/in/weshopmans/ James  Healey:   linkedin.com/in/jamescundarihealey/   Abraic  helps  improve   business  processes  &  outcomes for  IT  organizations.
  44. 44. The  Role  of  IT  in  M&A  Events 44 Learn  more:  abraic.com/blog   Abraic  helps  improve   business  processes  &  outcomes for  IT  organizations.

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