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Supported the Simultaneous Merger of Three Software and Service Companies

Background and Challenge

L.E.K. Consulting was engaged to support the merger of three leading providers of governance, risk management, and compliance (GRC) software solutions. The combined software and services company was anticipated to become a strong and rapidly growing entity, but establishing the leadership team from the management pool of the three companies presented important challenges. A number of redundant positions existed and tensions were high as the selection process played out. Further complicating the formation of the management team and the overall integration efforts was the need to meet high growth expectations, address underperformance by one of the merging companies and achieve aggressive synergy targets while managing a significant debt load.

Approach and Recommendations

L.E.K. performed a detailed synergy analysis which provided our client the added confidence it needed to aggressively negotiate the transaction. We played a neutral and constructive role in helping our client shape the management team and organizational structure, which alleviated some of the tension and politics during the selection process. To support the integration planning for all three companies, L.E.K. developed the integration strategy that addressed the critical integration needs and ensured the combined company could achieve its objectives. We mobilized 13 functional integration teams and guided them on the development of detailed plans which aligned with the company’s financial and operational integration objectives.

Results

The senior management team was established, the organizational structure was modified to fit the combined company’s strategy and key talent was retained. Synergy targets were validated early after the deal closed and integration plans were aligned to meet the targets. With L.E.K.’s guidance and support, the businesses avoided short-term interruptions and successfully completed the integration. The combined company has since achieved its synergy targets and integration objectives.