When smart strategizing helps integrate a global acquisition
A €4.5-billion Europe-based company had made a bold move—then it was time to follow through. The company, which specialized in construction and civil engineering for big infrastructure projects, acquired a North American construction firm that excelled at highway systems. The deal was part of an aggressive growth strategy that included pushing into new geographic markets.
To make sure the acquisition delivered as promised, leadership asked AlixPartners to help them tackle three challenges: (1) build a four-year business plan for the acquired company, (2) define a governance model for it, and (3) execute a post-merger integration (PMI) strategy.
A three-pronged approach sets the stage for success
We developed a four-year business plan for the acquired firm, rooted in analytics around the acquisition’s market, its order history, and customer-segment-growth projects. This analysis informed our strategy for marketing the company’s services more effectively in the target market and enabled us to identify the changes the acquired firm could make to meet the parent company’s profit-margin. Finally, we set up the full suite of financial statements—P&L, balance sheet, cash flow.
To define the governance model, we proposed a new managerial reporting structure; we determined which reports were needed for proper governance, identified which sources would produce the data needed for those reports, and ensured access to those sources. We suggested a new cadence for governance-related meetings, including the board of directors and the audit and risk committee, as well as committees focused on operations and commercial strategy.
To execute the PMI strategy, we set up a program management office (PMO) that managed activities such as establishing alignment meetings and easy-to-use communication channels between the two companies. We also assembled teams to take charge of key efforts crucial to the integration process—such as defining procurement, risk management, and reporting protocols for the merged entity. These teams collectively comprised more than 100 individuals, working across two countries.
When it really matters
With a four-year business plan, a rigorous governance model, and both an understanding of and access to the right data to inform key decisions, the acquired company was able to tightly integrate business processes, procedures, and deadlines with the parent company.