Delivering Value from a M&A
Industry: Manufacturing and Distribution
Project: Acquisition of the Australian New Zealand division of a multinational specialised metals manufacturer and distributor.
Background: The client made a strategic acquisition of the ANZ division of a company with a related specialised product distribution network across Australia and New Zealand. Due diligence focused on financials and assets and market strategy. The acquired division was performing poorly and had branches and warehousing across all states of Australia and NZ.
The problem: Understanding the capability of the management and sales force now acquired and how to identify barriers (people related) to delivering the business case.
The solution: Psychometric assessment and in-depth interviewing and workplace observations of senior management and sales personnel was undertaken, as well as an assessment of leadership and delivery of business improvement projects.
AblesonHowes and its Associates conducted an appraisal of all senior personnel across both the client organisation and the acquired organisation. During this exercise we worked with the client to facilitate a discussion around the traits, values and behaviours of highly successful personnel. The outcome of these workshops became the foundation for our assessment of the potential and aptitude of the new personnel. Quite simply, the client asked, “ Can you tell us what we have bought with respect to people and leadership capability.” And, “in merging the two businesses, are there hidden opponents or barriers to success and how do we deal with these?”
SHL occupational preferences testing along with verbal, numerical and abstract reasoning tests were carried out and during the debrief interview an opportunity was taken to probe aspiration and motivation against test results.
Results: Our client had already made observations about the cultural differences between the bureaucratic multinational and their own, more entrepreneurial and commercially driven culture. The individual interviews and assessments provided important insights and guidance into the nature of strategies needed to successfully integrate the acquired business into the clients more financially successful operations. For example, training to improve business acumen was developed and provided, expectations around monthly deliverables better communicated, and even training on managing team performance was identified as a gap and actioned. Importantly, hidden opponents and barriers to change were uncovered in the process and action was taken to transition out those individuals who were not capable or willing to change.
The psychometric testing enabled early identification of ‘right person, right role’ and the interviews and observations uncovered training and development needs and the most cost effective steps to facilitate not only a commercial turnaround of the acquired business, but also, more timely integration of processes and systems. Over 4 years the client delivered on their business case a growth in return on capital employed from 4% to over 30%.
The client undertook a review of the process and agreed that in future acquisitions, hidden opponents and barriers to change would be identified and acted upon sooner to facilitate faster achievement of the business case.