www.mranet.org Mergers & Acquisitions - Due Diligence Process MRA-The Management By: Patrice Hoeschele SHRM Conference 2014 Conducted by: Patrice Hoeschele 262.696.3437 patrice@mranet.org
Ice Breaker
Acquisition humor by Dilbert
Objectives Learn the keys to M&A due diligence planning and execution success Learn about the 4 stages of a merger/acquisition Define risks of executive(s) perceptions, assumptions and reactions to the due diligence process
Merger Combining of two companies where one new company will continue to exist. Combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. Also defined as an arrangement whereby the assets of two or more companies become vested in or under the control of one company.
Acquisition Buying of assets of one company from another company. An action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Purchase by one company of controlling interest in the share capital of an existing company.
Reasons for Mergers & Acquisition Synergy Acquisition of technology, assets or talent Diversification of products and services Increased market share Increasing capabilities & sharing expertise
Keys to success Drive, lead, and formulate strategy, execution and implementation Involve people and impact key human issues Take an active role in the change process
Best practices during and after merger & acquisition Identify leaders from both the companies Train managers on the change Explain new roles Orientation programs policies and procedures performance management, compensation, benefits and welfare schemes Skill identification and mapping Planned communication & team building activities
Merger & Acquisition Stages Prepare Due Diligence Integrate Implement, Monitor, Measure
Prepare Do your homework Prioritize Establish timelines Create integration teams Create a new strategic plan
Your Preparedness
HR Due Diligence Files Payroll Benefits Recruitment Business Hours Labor Law posters Employee Handbook
HR Due Diligence I-9 Safety Training Terminations Compensation structure Leave of Absence/FMLA Worker s Compensation
HR Due Diligence Recognition Mentoring Job Descriptions Employee Relations Succession Planning Government reporting Performance Management
Helpful documents to share Handbook Exit interview form Internal newsletters New hire survey form Terminology documents Job Description template and sample Sample Performance Improvement Plan
Helpful documents to share Benefit Summary New Hire Packet Benefits Packet Employment Application Authorization and Release Performance Management forms Sample job requisition and job posting
A little acquisition humor
Risk management: Executive perceptions, assumptions and reactions Time Scope Cost
Risk Management Culture clash Uncertainty paralysis Key customers defected Key employee departures Management disagreement on future direction Expectation misunderstanding leading to morale plunge
Forecast Human Capital The set of skills which an employee acquires on the job, through training and experience, and which increase that employee's value in the marketplace. InvestorWords.com
Forecast Human Capital Do not assume acquiring Company has all the talent. What is the best location for the function? Overstaffed/Understaffed? Talk to key staff about critical opportunities.
Culture Communication Chemistry Best Practices
Merger humor by Dilbert
People Culture Organizational Assets Success
Leverage Partners Expertise Objectivity Best Practices Share the work Additional Insight E.I. = External Intelligence 2nd Sight of Ears and Eyes
Leverage Partners MRA Broker Vendors Members Consultant Legal Counsel Benefits Carrier
Moving Forward Set Priorities Mutual timeframes Support each other Have a sense of humor Celebrate the small wins
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