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MERGERS, ACQUISITIONS & DIVESTURES.

Whether it’s internal assistance or help across global portfolios, we’re here to be a value-added service for PE firms to realize the full potential of their acquisitions and merged companies. From HRIS implementation to talent acquisition, benefits realignment after M&A to performance management overhauls -- we’re available when you need us, every step of the way.

We adopt a holistic approach to supporting all HR aspects of a private equity transaction relating to the acquisition and integration of a new platform or a bolt-on to an existing platform. 

Whether it is a corporate carve-out, an asset deal, or a stock deal, we are poised to tackle the nuances related to HR strategy and operations, HR compliance, payroll, and benefits. We work alongside your deal, legal, and risk teams to ensure the HR aspects of due diligence are properly assessed and the HR stage is set for smooth integration. 

drive a culture of value creation

Often dictated by shareholder concern, and business cost pressures, planners move forward focusing almost entirely on process integration. However, they forget that it is people who run businesses, and therefore a one-dimensional integration of process alone will be superficial, and it will snap at the slightest of hiccups.

This brings us to the next question of how to get people integration done. People have a lot of inertia, which in this case is also coupled with institutional memory inertia. Moreover, as stated above, merging entities don’t really trust each other.

The time it takes to turn a company around is most often a function of the firm’s ability to transform talent, leadership, and capability. A company turnaround focuses on costs and can often be done through financial reengineering and cost cutting measures. A transformation requires more fundamental changes in the organization culture, management processes, and talent. LCPs can help architect a transformation by answering why transformation is required, what the transformation look like, how to make the transformation happen, and who to involve in it.

To facilitate transformation, LCPs also often conduct an audit of the leadership and culture in portfolio companies. In our research we have found that leadership has a 10 to 15% impact on financial performance and a 25 to 30% impact on market valuation. One PE executive told us that the hold time for transformation can be cut in half with the right leadership in place, but it often took them far too long to assess, identify, and implement the right leadership. In one PE company, they claimed that 60 to 70% of the acquired company leadership teams had to be replaced for the company to be transformed. About 20% of the CEOs had to be changed twice. Consequently, the best LCPs conduct annual leadership and culture audits of portfolio companies to establish a performance baseline and prioritize actions management teams must take to accelerate growth.

establishing the values of “intangibles” like leadership and culture has become essential for securing favorable divestiture pricing. LCPs can use the results of their annual leadership and culture audits to demonstrate continual improvement in the portfolio company’s talent, capability, and leadership, and instill increased confidence with buyers that past positive financial results are will continue sustainably in the future.

The buying, selling or take-over of an existing business (mergers, divestures, and acquisitions) can often result in complex, far reaching reorganisations of work, roles and employees.  The most well-known of these special reorganisations is probably TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) which may likely include service provision changes.

 

TUPE refers to the process of moving (transferring) employees from one business to another. It is designed to protect the rights of employees in the event of a change of employer.  Any dismissal in connection with the transfer will be automatically unfair unless the dismissal was for an economic, technical or organisational (ETO) reason entailing changes to the workforce. 

 

All reorganisation initiatives need to be handled correctly as most of them have a statutory process that must be followed (as well as keeping employees engaged), and TUPE is probably the most complex of them all.

 

With our experience, we can either manage the whole process for you or just guide you through the various stages – you decide.

Effectively managing the processes and change associated with corporate transactions is critical for their success, while also minimising the financial impact of business disruption and people risks. MCR brings a combination of international consultancy and senior practitioner / implementation experience in advising on and managing the HR and reward aspects of company mergers, acquisitions and disposals, integrations and internal re-organisations. We ensure that HR best supports delivery of the business case for any corporate transaction.

 

Pre-Deal Due Diligence and Bid Support
Quantifying Change of Control Liabilities
Side-By-Side Pay & Benefit Comparisons and Benchmarking
Employee Cost Projections
Identification of Opportunities and Risks – Demographics, Talent etc
Design of Retention and Future Incentive Plans
Documentation Review and Advice
Succession Planning
Learning & Development
Culture Change

  • Due diligence

  • Current organizational culture and post-merger cultural assessment

  • Cultural transformation optimization

  • Planning organizational structure

  • Alignment of leaders and leadership styles in the organization

  • Structuring of leadership teams

  • Assessing HR capabilities and competencies

  • Designing staffing models

  • HR planning as per legal requirements of new country

  • Planning and implementing techniques/programs for change management

  • Benchmark retention

  • Analyzing Merger & Acquisition strategy from a people and leadership point of view

  • Defining the capabilities needed to manage in the new business model

  • Assessing people and teams against the capability model

  • Selecting Integration Manager and project teams

  • Coaching key people in new roles

  • Developing existing capabilities and new behaviors

  • Recruiting missing capabilities

  • Mitigating risks in employment law compliance and HR best practices

  • Implementing change management and organization development

 

 

Enabling business growth through mergers and acquisitions

The people aspects of mergers and acquisitions often take a back seat behind the financial implications. Yet if such ventures fail it is often due to people related issues with many mergers and acquisitions failing to deliver the desired outcomes.

Our experienced HR consultants help you manage the complex process of merging businesses in relation to TUPE requirements and in prioritising the critical activities at different stages of the transition, including:

  • HR due diligence

  • TUPE

  • Collective consultation

  • Communication

  • Integration into new teams and roles

  • Changing working practices

  • Redundancy

  • Management support and coaching

  • Company culture and managing change

Employment law relating to mergers and acquisitions is complex – coping on your own brings significant risks

We help you identify the risks associated with mergers and acquisitions and how to avoid them, including potential for unfair dismissal, breach of contract and redundancy claims.

Our aim is to help ensure that your business achieves its desired outcomes following mergers and acquisitions including managing any resulting job losses, restructures, and the introduction of new working practices.

Successful mergers and acquisitions are about people

For your employees impacted by the change, it can be stressful. There may be uncertainty, anxiety and resentment which can result in low productivity at a time when your business needs to be working effectively.

We help you to gain buy-in from staff and managers through clear communications, staff engagement and robust plans for change. We work with you before, during and after the transition to ensure the people dimension is at the forefront of decision-making and supports your business aims.

How we can help

  • Help you decide whether TUPE applies and, if so, identify who will transfer

  • Assist you with the Due Diligence

  • Construct a TUPE process plan and ensure the right steps are taken at the right time

  • Review Business Continuity and communications and engagement of remaining staff

  • Plan and manage consultations with staff.

  • Prepare the relevant communications, documents, letters and forms throughout

  • Provide the required documents for the incoming employer.

  • Plan and manage any potential redundancies.

  • Provide a process that is considered fair, objective and unbiased that eliminates the Risk of things going wrong

  • Provide Peace of mind in knowing we are managing the issue in a legally sound way, whilst being pragmatic