Thoughts on Post Merger Integration

1. Thoughts on Post Merger Integration

2. The degree of integration will directly impact value capture. Status Quo Holding Company Best of Both Full Integration Retain strengths of both companies Provides portfolio management approach to products and services Identify and adopt best practices from each company Apply strengths of Acquirer • Fast • Limits debate • Strengths of both organizations are retained • Minimal interruption to each business • Limited resources required for integration • Limits cost synergy capture • Limits interchange of culture and skills • Worst practices of both companies are retained • Minimal disruption to acquired company • Fast • Minimal debate • Sharing of information and technology possible • Return acquired capabilities/customers • Limits cost synergy capture • Minimal interchange of skills • Limits revenue enhancement potential • Combined company benefits • Supports consensus building • Allows identity of acquired company to remain visible in new company • Generates feeling of worth among acquired employees • Potential indecisiveness could paralyze organization • Risks choosing lowest common denominator rather than best practices • Time intensive • Eliminates uncertainty • Minimal debate • High-level strengths of acquired may be incorporated • Most effective at capturing near-term synergies • Most effective at encouraging upside potential • Risk losing acquired’s capabilities/customers • Potentially alienates acquired employees and reduces productivity Advantages Disadvantages Senior executives should develop a checklist to manage the integration and hold their teams accountable for achieving the merger goals.

3. Senior executive integration checklist. Focus the organization on delivering on its operating commitments. Clarify top management roles and responsibilities during the integration. Set targets for value capture and synergies Define a vision for the future, the ultimate end state, and link to integration process. Define your role in the integration and appoint an integration leader with clear performance metrics. Create guiding principles that support decision making during integration. Assemble a transition team to perform detailed planning. Assess competitive response and ensure operational focus. Initiate customer embracement program. Establish a rigorous communication campaign both internally and externally including the roadshow.

4. Approach to integration planning and execution. Determine the level of integration. Identify, implement and track synergy capture projects. Prioritize and execute functional integration plans. Pre-Announcement, Announcement, Pre-Close Integration Transaction Close, Post-Close Integration Integration Framework Rapidly Stabilize Capture Sustainable Value 15 – 90 Days 45 Days– Longer Term 0 – 30 Days Program Management Program Management Communications Day One Planning & Preparation Synergy Capture Process & Tracking Portfolio Analysis and Rationalization Functional Level Integration Teams • Program Management • Determine level of integration (holding, best of both, full integration) • Develop integration workplan & strategy • Organize/structure merger teams • Define issue resolution process • Track benefit realization • Address manage retention/severance issues • Day One Planning & Preparation • Prioritize Day One requirements • Coordinate and integrate functional Day One preparations • Develop Short Term Operating Model / Policy Statements (when needed) • Portfolio Analysis and Rationalization • Review business plans and results • Assess strategic plans • Rationalize competencies (assets, customers, channels, technologies, etc) • Marketing & Bus Dev • Manufacturing • Facilities • Supplier Management • Functional Level Integration Teams • HR • IT • Finance • Engineering • Synergy Capture Process • Identify synergy opportunities • Implement project plans • Track realization of benefits • Communications • Develop comprehensive communications plan (audiences, messages, timing, etc.)

5. Contact Information Randy Ahlm RCA Consulting, LLC www.rcagrowth.com randy@rcagrowth.com 612 220 0704