1 / 19

Merger 101

Merger 101. 2/4/2014. Agenda. Definition of merger “Mergers” in everyday life Organizational mergers Why merge? High-level merger steps Retaining the best of both companies Importance of change management Role of leaders. Definition of Merger.

lazaro
Download Presentation

Merger 101

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Merger 101 2/4/2014

  2. Agenda • Definition of merger • “Mergers” in everyday life • Organizational mergers • Why merge? • High-level merger steps • Retaining the best of both companies • Importance of change management • Role of leaders

  3. Definition of Merger • To merge: to cause (two or more things, such as two companies) to come together and become one thing; to join or unite (one thing) with another; to change into or become part of something else in a very gradual way • Merger: The act or process of combining two or more businesses into one business • Merger in the nonprofit world: a “marriage” of two organizations and two Boards

  4. “Merger” in Everyday Life • Merging during daily commute • What does it take for a smooth merge? • When do you run into problems merging?

  5. Marriage and Organizational Mergers • Marriage Organizational Merger • Casual Dating Looking for merger partners • Friendship Letter of Interest and due diligence • Engagement Letter of Intent • Wedding Merger close • Honeymoon Initial integration phase • For ever after The important work begins

  6. Why Are We Looking at a Potential Merger? • Create a continuum of services under unified control, highlighting expansion of geographic spread • Decrease fragmentation of services for consumers • Able to serve more clients in a holistic manner • Larger market share to compete in new marketplaces • Need size to move into Healthcare arena • Better marketing position • Higher public profile • Greater political influence • More strategic fundraising • Greater economies of scale

  7. High-Level Merger Steps • Letter of Interest • Due diligence – quiet, but a lot of work behind the scenes • (Dec – March) • Board approval to move forward – Letter of Intent (2ndQtr) • Planning for the future and communications plan • Merger close - time to celebrate (on or before July 1, 2014) • Change legal structure and name • Implement merged leadership and Board structure • Agree on and work towards a common culture • Combine financial reporting (3rdqtr 2014) • Evaluate operations and systems for opportunities (4thqtr) • Implementation of opportunities (starting in 2015) • Ongoing: CHANGE MANAGEMENT

  8. Letter of Interest • Establishes the mutual commitment to pursue merger exploration • Indicates that the other party is a serious merger partner • Sets a timetable for exploratory conversations • Both parties agree to good-faith efforts to work with the other on those explorations • Includes a commitment to hold off on pursuing merger discussions with other organizations

  9. Due Diligence • A time period of review, with a fixed end date • Appears quiet, but lots of activities behind the scene • Handled by a small core team of leaders – merger task force • Purpose: to determine if there are any “show stoppers” or concerns that would prevent the two parties from merging • Involves exchange of vital documents • May involve external auditors and lawyers to review financial and legal documents • Due diligence team for each organization will scrutinize documents and follow up on any questions or concerns

  10. Letter of Intent • After the due diligence ends, each team presents their findings and recommendations to their Board • The Board will evaluate all aspects around the proposed merger • If the Board members determine that a merger is in the best interest of the two organizations, they will draft and sign a Letter of Intent to merge. • The Letter of Intent will include a timeline for a proposed close of the merger

  11. Merger Planning • Involves planning for the future • Corporate structure • Board structure • Management structure • Brand structure • A joint team will develop a communications plan • Staff • Clients • Donors • Federal, state, local authorities • Financial pro forma statements • What will the financials look like for the merged entity?

  12. Merger Close – Time to Celebrate • The Boards vote to approve the merger • Implement changes in legal form • Signing of the merger agreement • Changes to charters, bylaws, and third-party contracts • Unveiling of new brand, letterhead, etc. • Important: Timing of announcement between the two organizations

  13. New Leadership and Governance Structure • Leadership structure can vary based on specifics of the two merged entities • Chief Executive Officer (CEO) • Chief Financial Officer (CFO) • Chief Operating Officer (COO) • New Board structure • Blend of Board members from the legacy organizations

  14. Blending of Cultures • Cultures may appear similar on the surface • But values and customs may be very different • What stories are important in your organization’s history? • What values are important to your organization? • Who are our heroes? • What are your most cherished customs? • Try to define and document your culture before the merger • Agree on most cherished values and customs you want to retain in the new organization

  15. Implement Integration Plan • Establish combined financial reporting • Connect program teams and share expertise • Explore opportunities to leverage expertise across teams • Explore future expansion opportunities • Integrate administrative teams - specialization • Integrate systems to facilitate tracking and reporting • Enhance operations • Develop common policies and procedures • Share and implement best practices

  16. Retaining the Best of Both Organizations • Integrate Whole-Person, Whole-System health and wellness throughout the organization • Expanded opportunities for lateral and upward movement • Enhanced positive culture for staff and clients • Greater collaboration and communication • Brand name recognition • Pride in who we are and our common future • Strong IT systems and EHR foundation • Quality assurance and quality improvement • Efficient administration and operations • Specialization

  17. Importance of Change Management

  18. Importance of Change Management • Change cycle (feelings, thoughts, behavior): • Loss – fear, caution, paralysis • Doubt – resentful, skeptical, resistant • Discomfort – anxious, confused, unproductive • Discovery – anticipating, creative, energized • Understanding – confident, pragmatic, productive • Integration – satisfied, focused, generous • Each person will go through each stage at their own pace • Work with your team to help them get “unstuck” in any of these stages • Communicate, communicate, communicate!!!

  19. Role of Leaders • Be a positive role model • Stay informed to ensure one consistent message • Understand and feel comfortable with the message • Communicate openly, share information with your team • Address staff questions openly and honestly • Address rumors and gossip right away • Work with your staff through concerns and emotions • Support an environment of openness • Support each other, be mindful and kind • Recognize that you may feel a wide range of emotions as you go through this change and seek support

More Related