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Supply Chain Integration: Getting the Benefits from Mergers

This document discusses the benefits of supply chain integration in mergers and acquisitions, with a focus on the case of Hydrogenics and Greenlight. It explores market dominance, financial strength, improved product line, lower cost structure, global presence, independence, and access to strategic partnerships as key advantages.

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Supply Chain Integration: Getting the Benefits from Mergers

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  1. Supply Chain Integration:Getting the Benefits from Mergers

  2. The Deal • On Jan. 8, 2003, Hydrogenics acquired Greenlight for $32.5mm • Paid a combination of HYGS stock (90%) and cash (10%) with 12 and 18 month lock-up • Combined #1 and #2 fuel cell test suppliers globally • Greenlight established as wholly owned subsidiary responsible for test stations and testing services • Hydrogenics test business rolled into Greenlight and run as independent, autonomous unit out of Vancouver (kept Greenlight name) • Hydrogenics Toronto facility focused on stacks, power modules, H2 generation and engineering services • Had to deal with issue of customers concerns over independence and ownership by competing company

  3. Benefits of Combination • Market Dominance- eliminates competition and now have most of the fuel cell companies as customers • Financial Strength- parent company with cash and GPT growth with all test station business moving to Vancouver • Stock Liquidity an Increased Valuation- for Greenlight founders and employees • Improved Product Line- combine complimentary products lines • Lower Cost Structure- Eliminate duplication and greater purchasing power and manufacturing efficiencies from increased volumes. • Global Presence- offices in Japan, Germany and east coast North America • Focus- allows HYGS to grow power products business • Independence –Customers comfortable with separate entity for test • Access to Strategic Partnerships – Introduced HYGS to Chevron Texaco and GPT to GM

  4. Integration Team: Requires Input & Focus From Both Organizations Steering Committee ROLE: Meet monthly to review status and resolve issues Pierre Rivard Boyd Taylor David Chapman Gary Brandt(1) James Dean(1) Jonathan Lundy Integration Management Integration Resources ROLE: Coordinate and manage all integration activities. Identify risk factors, issues and recommend strategies to mitigate. ROLE: Provide information and support as required throughout integration Dave Wetter Bob Williamson Melissa McKinnon Bruce Townson Functional Integration Teams ROLE: Facilitate teams through design and implementation for their core area. Resolve issues or escalate to Integration Manager IT HR Service & Support Sales & Distribution Manufacturing and Supply Chain Products Finance Aaron Hardwick Mike Rhodes Chrisha R. Rolanda Chen Peter Scheck Andy Chen Huseyin Ayman Jeff Plato Mark Kammerer Alex Beaudet James Dean Heather Ito Tom Hoang Frank Ludgate Gord Lamont Roger Harper Ravi Gopal Charley Pappas Jim Collins Ken Chaun Allison Ruch Lead Members • Day to Day contact on the Steering Committee for Integration Teams

  5. THIS IS ONLY A PARTIAL VIEW OF THE DOCUMENT.

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