Every deal has a life-span. If it drags on too long, deal fatigue will set in and, even if the transaction makes sense for both parties, it’s likely to fail if it’s not actively kept on track.
Project management is an integral part of any deal we initiate. We also take on project management / consulting engagements with clients who are already part of the way through a M&A.
Minimising the impact on staff – Change Management is part of our process from Day 1
Ensuring key stakeholders have an accurate view of project progress
Pushing the project team to keep to the agreed deadlines
Empowering senior management in the client company to take an active role in the transaction – this assists in transferring knowledge and ensuring buy-in post-deal, but also helps to contain consulting costs
We're concerned about 'completed Deliverables', not 'Activities' – it's easy to follow real project progress
Stress on staff is minimised, making the future integration easier (and without alarming them unnecessarily if you opt not to proceed with the deal)
It's a reality that not everyone in the organisation will be in favour of the M&A – active project management enables the naysayers to be identified early, before they have a chance to derail the process
We extracted the Client from an investment that had the potential to destroy the holding company, prevented an expensive legal process and completed a successful MBO
Client: FMCG / Complementary health products manufacturer
Industry: FMCG / Complementary health
The Client / holding company had acquired a company in Australia without a proper Due Diligence and had then made poor choices in management hires. In 18 months, the subsidiary’s losses were putting the holding company’s survival at risk. That posed a threat to about 100 jobs back in South Africa.
Moreover, the previous owner had vendor financed part of the purchase price. The subsidiary’s poor financial performance was preventing it from servicing the loan and the previous owner was threatening legal action. A new CEO at the holding company engaged us to find a solution.
The results of the initial diagnosis of the subsidiary were 'close it down or sell it' and 'it's not likely we will be able to trade it to profitability”.
However, local management proposed a Management Buy-out. We were not able to interest other Buyers so we went along with management's proposal, with the knowledge that they would still have to raise the purchase amount.
Moreover, we were able to persuade the previous owner to become part of the transaction and to suspend any legal proceedings against the holding company and the subsidiary.
At the start of the project, we were short on credibility:
• The Client was behind on payments to the previous owner
• The subsidiary in Australia had not been adequately managed by the holding co.
• There had been genuine mismanagement in the subsidiary which became more apparent as the project progressed
Our approach was just to keep doing 'the right thing', build credibility with the previous owners (and negate the possibility of legal action) and to eventually gain the moral high ground. Later, we also had to force the management team to follow through with their undertakings and we used the NSW courts to do this.
The MBO went ahead, the Client got paid for their shares and there was no legal action with the previous owners.