THE M&A TOOLKIT: PEOPLE STRATEGY FOR BUSINESS SUCCESS. Keeley Mooneyhan, SPHR Managing Director HR Matters, Inc. NHRMA Conference 2012

Transcription

1 THE M&A TOOLKIT: PEOPLE STRATEGY FOR BUSINESS SUCCESS Keeley Mooneyhan, SPHR Managing Director HR Matters, Inc. NHRMA Conference 2012

2 85% of Failed Acquisitions are Attributable to HR Issues. 2

3 Today s Learning Objectives 1 Leadership Engagement 2 M&A Process and Key Terms 3 Connecting the dots: Business to People Strategy

4 Biz Strategy Core HR Leader Engagement SWOT HR Leadership and Engagement Leadership Rhythm

5 M&A Milestones/Deal Flow Negotiations Confirmatory Due Diligence Sign/Close M&A Process Strategy Identified Letter of Intent Definitive Agreement Integration

6 What is Strategy? "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations".* * Johnson and Scholes (Exploring Corporate Strategy)

7 Outcomes of Setting Deal Strategy Define how the organization will create value Confirm areas of focus and strategic direction Identify any gaps in resources (skills, knowledge, assets, budget, partners, etc.) Understand the values and expectations of key stakeholders

8 HR Strategy: Key Strategy Steps Define Objectives: What do we want to achieve Define Strategy: How do we meet our objectives? Tactics: What will we do? Plan: What are our priorities, when, and who will do it? Implementation: What is the Execution plan?

9 Let s Make a Deal Definitive Agreement Letter of Intent Structure

10 Target Company

11 Structure of M&A Transactions Stock Purchase Asset Sale Joint Venture TARGET ASSETS TARGET TARGET JV PARTNER

12 Letter of Intent (LOI) Initial Agreements Covenants Conduct of Business Non-disclosure Agreement Regulatory Requirements (Public or Private Company) Expiration/Non-binding Provisions

13 Confirmatory Due Diligence Intellectual Property Physical Assets Revenue History Third-party Relationships People On-balance sheet and off-balance sheet assets/liabilities

14 Definitive Agreement (DA) Asset or Stock Purchase Agreement (APA or SPA) Final financial, tax, and legal details Consideration Escrow Holdback Earn-out Carve-out Closing Conditions Representation and Warranty (Reps & Warranties) Indemnification Seller s and Founder s Non Complete Disclosure Schedule Transition Services Agreement (TSA) Employee Terms Key and Named Employees Stock/Equity Treatment Change In Control and Double Trigger Section 280G Non Solicits Non Compete Successor Liabilities International Considerations

15 Integration

16 SWOT Analysis Greatest Strengths of Business and HR Weaknesses of Business and HR Where s the Opportunity? External Threats

17 Summary: HR M&A Toolkit Leader Engagement: Strategic Direction & HR Alignment Work with Leadership team to define the business strategy including the product roadmap, desired end state, guiding principles, and rules of engagement. Define the people strategy to support the business objectives. Define what they can do/not do now. Develop a coaching relationship, providing advice and guidance as business imperatives change or accelerate. HR Strategy to Support Business Define corresponding people strategy for the business objectives Document Value Drivers for each business and any acquisition objectives from a people perspective Outline required resources to support the strategy Organizational Details, Walking Deck Capture the business strategy and corresponding people strategy Document Value Drivers for each business and any acquisition objectives Define which functions will be required to participate in a potential deal, who will lead each function and whether or not the effort will require additional resources Capture key learnings, historical data, and document plans of record M&A Terminology Familiarize team and leaders with terms that may have an impact on the people strategy. Define additional terms for your organization The Initial Plan and SWOT Analysis Know the organization: identify organization strengths, weaknesses, opportunities, and threats. Build a SWOT for every scenario when applying strategic goals and value drivers to any acquisition or business change situation to determine a potential plan to mitigate risks and preserve value. Build out plans to include due diligence, current plans or record, and potential HR work streams, milestones, budgets and assumptions to get to the end state.

18 DISCUSSION

19 Keeley Mooneyhan, SPHR Managing Director HR Matters, Inc HR Matters, Inc.. All rights reserved. The information herein is for informational purposes only and represents the current view of HR Matters as of the date of this presentation. Because HR Matters must respond to changing market conditions, it should not be interpreted to be a commitment on the part of HR Matters, and HR Matters cannot guarantee the accuracy of any information provided after the date of this presentation. HR MATTERS MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

20 APPENDIX- HANDOUT

21 THE M&A TOOLKIT: PEOPLE STRATEGY FOR BUSINESS SUCCESS Keeley Mooneyhan, SPHR Managing Director HR Matters, Inc. NHRMA Conference 2012

22 Summary: HR M&A Toolkit Leader Engagement: Strategic Direction & HR Alignment Work with Leadership team to define the business strategy including the product roadmap, desired end state, guiding principles, and rules of engagement. Define the people strategy to support the business objectives. Define what they can do/not do now. Develop a coaching relationship, providing advice and guidance as business imperatives change or accelerate. HR Strategy to Support Business Define corresponding people strategy for the business objectives Document Value Drivers for each business and any acquisition objectives from a people perspective Outline required resources to support the strategy Organizational Details, Walking Deck Capture the business strategy and corresponding people strategy Document Value Drivers for each business and any acquisition objectives Define which functions will be required to participate in a potential deal, who will lead each function and whether or not the effort will require additional resources Capture key learnings, historical data, and document plans of record M&A Taxonomy Familiarize team and leaders with terms that may have an impact on the people strategy. Define additional terms for your organization The Initial Plan and SWOT Analysis Know the organization: identify organization strengths, weaknesses, opportunities, and threats. Build a SWOT for every scenario when applying strategic goals and value drivers to any acquisition or business change situation to determine a potential plan to mitigate risks and preserve value. Build out plans to include due diligence, current plans or record, and potential HR work streams, milestones, budgets and assumptions to get to the end state.

23 Biz Strategy Core HR Leader Engagement SWOT HR Leadership and Engagement Leadership Rhythm

24 HR Strategy: Key Strategy Steps Define Objectives: What do we want to achieve Define Strategy: How do we meet our objectives? Tactics: What will we do? Plan: What are our priorities, when, and who will do it? Implementation: What is the Execution plan?

25 M&A Terminology List M&A Milestones/Deal Process Business Strategy Negotiations Letter of Intent Confirmatory Due Diligence Definitive Agreement Deal Sign/Close Integration Structure Stock Asset Joint Venture Deal Terms/Legal Agreements Letter of Intent (LOI) Initial Agreements Covenants Conduct of Business Non-disclosure Agreement Regulatory Requirements (Public or Private Company) Expiration/Non-binding Provisions Definitive Agreement (DA) Asset Purchase or Stock Purchase Agreement (APA or SPA) Final financial, tax, and legal details Consideration Escrow Holdback Earn-out Carve-out Retention Pool Closing Conditions Representation and Warranty (Reps and Warranties) Indemnification Seller s and Founder s Non Complete Disclosure Schedule Service Level Agreement (SLA) Transition Services Agreement (TSA) Employee Terms Key and Named Employees Stock/Equity Treatment Change In Control and Double Trigger Section 280G Non Solicits Non Compete Successor Liabilities International Considerations

26 Conduct SWOT Analysis Positive Negative Internal Strengths Weaknesses External Opportunities Threats

27 Keeley Mooneyhan, SPHR Director of M&A Practice HR Matters, Inc HR Matters, Inc.. All rights reserved. The information herein is for informational purposes only and represents the current view of HR Matters as of the date of this presentation. Because HR Matters must respond to changing market conditions, it should not be interpreted to be a commitment on the part of HR Matters, and HR Matters cannot guarantee the accuracy of any information provided after the date of this presentation. HR MATTERS MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.