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General Session: Successful Culture Development & Integration in an Active M&A Environment
The document discusses the integration and culture development strategies within mergers and acquisitions (M&A) in the energy sector, focusing on C&J Energy Services and its various acquisitions. It emphasizes the importance of HR's role in assessing cultural fit, managing talent, and facilitating smooth transitions during M&A activities. Key insights include the need for effective communication, talent management, and retention strategies during the integration process.
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General Session: Successful Culture Development & Integration in an Active M&A Environment
- 1. SUCCESSFUL CULTURE DEVELOPMENT& INTEGRATION IN AN ACTIVE M&A ENVIRONMENT Moderator: Brett Haugh Principal & Executive VP, Ascende Marty Kunz VP Human Resources, C&J Energy Roger Mosby VP Human Resources, Kinder Morgan Laura Ramey VP Human Resources, Crestwood Midstream www.wfn360.com TALENT MANAGEMENT, DEVELOPMENT & ACQUISITION STRATEGIES IN ENERGY SUMMIT GENERAL SESSION
- 2. C&J Energy ServicesPresenter: Marty J. Kunz, SPHR Vice President-Human Resources Workforce Next Summit Omni Hotel- Houston Westside September 30, 2014
- 3. C&J Overview C&JEnergy Services is an independent provider of premium hydraulic fracturing, coiled tubing, wireline and other complementary services with a focus on complex, technically- demanding well completions. We provide our services in conjunction with both conventional and unconventional well completions, as well as workover and stimulation operations for existing wells.
- 4. 1997 1999 2002 2007 2011 2012 2013 2014 Josh Comstock Founded C&J in Robstown, TX Introduced Stand Alone Pumping Services Introduced Coiled Tubing Services Robstown, TX Introduced Fracturing Services: Robstown, TX Initial Public Offering on NYSE; Acquired Total Equipment Services; Corporate Office moved to Houston Introduced Wireline With Acquisition of Casedhole Solutions Opening of new Corporate office and New R&T Center; Acquired Tiger Casedhole; Acquisition of Nabors NCPS Acquired Tellus
- 5. $244.2 $758.5 $1,111.5$1,070.3 2010201120122013 Revenue ($MM) Financial Growth - Revenues
- 6. Areas of Operation We are geographically focused where there is the most opportunity, with service centers near the majority of prominent domestic shale basins.
- 7. Research and Technology • Downhole Tools Perforating Coiled Tubing • Wireline Tools Grand Opening Spring 2014 of new 95,000 sq. ft. Engineering & Manufacturing Facility • Surface Equipment Fracturing Coiled Tubing Wireline Pressure Pumping • Fracturing Chemistry
- 8. The C&J Family Our top-tier manufacturer of hydraulic fracturing, coiled tubing, pressure pumping and other equipment used in the energy services industry. Our global supplier of oilfield chemicals and technology. They supply, engineer, manufacture and apply specialty chemicals. Tellus delivers innovative Directional Drilling, MWD and LWD products and technologies to the oil and gas industry through contract engineering and in-house developments.
- 9. Oil & GasAwards 2012 Gulf Coast Oil & Gas Awards, Winner Drilling & Well Services Company of the Year 2013 MidCon Oil & Gas Awards, Winner Well Completion Company of the Year 2013 Gulf Coast Oil & Gas Awards, Winner The Preferred Technology Award for Excellence in Well Completion
- 10. M&A Activity atC&J • 2011- C&J acquires Total Equipment • 2012- C&J acquires Casedhole Solutions • 2013- C&J acquires Tellus Oilfield • 2014- C&J acquires Tiger Casedhole • 2014- C&J and Nabors Drilling announce C&J’s acquisition of Nabors Completion and Production Services
- 11. Total Equipment Acquisition • Was a main supplier of Coiled Tubing and Fracturing equipment for C&J • Vertical integration of supply chain • Approximately 150 employees • Stand alone operation
- 12. Casedhole Solutions Acquisition • Added a new line of business • Strong management team • Approximately 600 employees • Strong company culture • “Slow burn” on integrating • Systems • Policies • Procedures • Pay practices • Payroll • Just “completed” in 2014
- 13. Tellus Acquisition • Very small company (less than 20 employees) • Intellectual capital added to newly established Research & Technology group • Tellus needed capital to implement products and ideas • Integration effort minimal • Owner(s) stayed with C&J
- 14. Tiger Casedhole Acquisition • Tiger also small, but STRONG culture • Approximately 37 employees • Owner is now manager of that division • Strong resistance to becoming part of a “big company” • Unlike Tellus, Tiger had a “history” and long-tenured employees • Much softer integration approach • Lots of hand holding and reassurance • Slower burn on changes • The magical world of “California”
- 15. Nabors and C&J • Scheduled to close in Q4-2014 or early 2015 (Fast track) • Smaller company acquires larger one • (3,100 employees versus 7,000- 8,000 employees) • Complicated • Inverse acquisition • “Mother ship” remains • Cultures are very different • NCPS is not their “core” business • Must remain competitors until close • Systems (IT, HR, Accounting) work is intense
- 16. Thank You Visitwww.cjenergy.com to learn more about what we can accomplish for you
- 17. Roger Mosby VP– HR Kinder Morgan, Inc.
- 18. HR’s role inM&A (and Talent Management) The use of a Cultural Assessment Staffing and the Preliminary Integration Plan Available Talent and Pre-Close Activities Post-Close Integration
- 19. HR’s role inany merger or acquisition is to partner with Business Development to evaluate the human capital part of the business deal: The associated dollar costs Cultural issues Identified risks Integration issues The talent and talent gaps Defensive Talent Management The 90 Day Pre-Close Plan Integration Post-Close
- 20. Team lead– Usually an experienced generalist Benefits Compensation Talent Management HRIS Payroll Employment attorney External consultants, which could include: ◦ Older worker analysis (generally a law firm) ◦ ERISA benefit plans specialists ◦ Organized Labor specialist ◦ Outplacement
- 21. Work withHR Team Lead to apply cultural assessments & recommend integration strategies Identify Key Talent in the acquired company Defensive Talent Management Manage the Available Talent List Manage Outplacement: ◦ Manage Outplacement Vendor ◦ Internal and external job fairs ◦ Manage Transitional talent and other temporary talent needs Manage the severance process Onboarding
- 22. A CulturalSimilarities Assessment is useful in determining the “fit” between the companies and the direction of integration plans. Areas of assessment might include: ◦ Compensation ◦ Performance Management ◦ Benefits ◦ Company Perks ◦ Communications ◦ Work-Life Balance ◦ Ethics & Rules of Conduct ◦ Organizational Structure It is never too early to work on Integration!
- 23. Routinely lookat positions and people in both companies for the best to move the new organization forward Identify Key Talent in both companies and make an expression of interest Utilize Key Talent to develop the post close organization and which employees will fill RFT positions in the go-forward organization Select Transitional Employees Identify employees to receive severance Develop Available Talent List (Transitional and Severed employees) Develop the OWBPA list
- 24. The Available TalentList consists of those employees that will be terminated at close or at the end of their transitional assignment. If a large layoff is anticipated, consider allowing employees to self select layoff Once the AT list is developed, communicate in order to place internally Use the AT list for internal and external job fairs For those that are not placed, the Available Talent List becomes the working outplacement list
- 25. Talent Managementsupports the process that determines the number and business reasons to keep surplus employees beyond the close and attempt to place within the Company Develop incentive packages for Transitional Employees that cannot be placed: ◦ Preserve any severance rights ◦ Completion Bonuses ◦ Determine now the conditions under which a Transitional Employee could have early release ◦ Use the offer letter process to document the Transitional offer and the employee’s acceptance of the conditions
- 26. Outplacement –Will you use Internal or External resources, or a combination? ◦ If external, one vendor or two? ◦ All together or separate executive from others? Continue to manage Transitional Talent ◦ Transitional Talent may be needed to wind down a project but should be evaluated for future placement until they are actually severed Phased Exits – If the companies agree, phased Exits (terminations) before close prevents masses of people walking out at the same time Start the Severance Process
- 28. Close outthe severance process Continue outplacement Manage the Available Talent List with the remaining Transitional Employees Utilize the On-Boarding process for integrating those being merged into the dominant culture Reinforce good management practices via training: ◦ CBTs ◦ Short training sessions that overview a manager’s role in performance management, payroll/timekeeping, etc.
- 29. Connections ™ forAmerica’s Energy™ Connections for America’s Energy ™ ™ Laura Ramey Vice President, Human Resources Crestwood Equity Partners LP Crestwood Midstream Partners LP “Human Resource Leadership for Mergers & Acquisitions”
- 30. Connections ™ forAmerica’s Energy™ Agenda 30 • Introduction • Pre-M&A and During M&A Activities • Post-M&A Activities • Questions & Answers
- 31. Connections ™ forAmerica’s Energy™ 31 • General • Bottlenecks • Processing and Onboarding • Preparation / Supplies • Follow Up Pre-M&A and During M&A Activities
- 32. Connections ™ forAmerica’s Energy™ 32 Post-M&A Activities • Communicate, communicate, communicate •Key employees, retention, redundancies •Compensation •Roles, responsibilities, expectations; leadership team; and, new reporting relationships •Expectations, policies, procedures, standards and required training •Plan an employee appreciation event (first 90 days)
- 33. Connections ™ forAmerica’s Energy™ Presentation Title 33 Laura Ramey Vice President, Human Resources Crestwood Equity Partners LP Crestwood Midstream Partners LP laura.ramey@crestwoodlp.com 832.519.2268 Thank You
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