Background and Challenge
L.E.K. Consulting's client was a global leader in advanced materials technology, focused on assembly materials and functional/decorative coatings for the electronics and automotive industries.
We had been engaged in strategy work for our client when the organization was approached by a competitor with an unsolicited bid that was ultimately accepted. We were retained to provide post-merger integration (PMI) support through the transaction close and the initial mobilization of the post-close integration program.
Approach and Recommendations
We implemented an integration management program that instilled the rigor and discipline required to ensure a smooth closing of the transaction, with no impact on the business or customers. We worked closely with both organizations to inform the combined employee base, allay their concerns and manage the impact they experienced during the integration.
We leveraged our deep understanding of the industry to provide relevant commercial guidance (e.g., sales and marketing organizational design) and critical path integration activities.
Day 1 preparation was supported through detailed execution planning with key functional work streams (finance, HR, IT, legal, etc.), a weekly reporting cycle, and deep-dive reviews to ensure all critical items were on track and interdependencies were mapped.
We supported the development of integrated functional structures through detailed mapping of existing organization structures and resources and working sessions with business leads. Coupled with additional benchmarking analyses, we were able to validate headcount synergies for approximately 500 FTE. Detailed modeling of phasing, synergies and redundancy costs was used to build a clear picture of financial impact.
A clean team was deployed, allowing our client to make significant progress pre-close on a number of key synergy areas (e.g., manufacturing footprint rationalization, procurement savings). The client was able to prepare for Day 1 customer interactions, with a clear view on critical customer overlaps, relevant sales reps requiring coordination, and key cross-sell opportunities.
We established an integration management office that ensured coordination of all program activities, resulting in a smooth Day 1 transition.
Our PMI work validated cost synergies of close to £100 million, predominantly driven by organizational alignment. Our synergy validation work and tracking tool provided a detailed baseline and robust mechanism to ensure successful realization of cost synergies.
Our support ensured rapid development of integrated functional structures, allowing timely communication and preparation for synergy realization.