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NSPD on Bematech`s M&A process: a management tool proposal October, 2010

NSPD on Bematech`s M&A process: a management tool proposal October, 2010. GA. Company snapshot. Overview. Portfolio. Market. Financials. Background. Corporate Strategy: Carry out new acquisitions on a selective basis ;

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NSPD on Bematech`s M&A process: a management tool proposal October, 2010

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  1. NSPD on Bematech`s M&A process: a management tool proposal October, 2010 GA

  2. Company snapshot Overview Portfolio Market Financials

  3. Background • Corporate Strategy: Carry out new acquisitions on a selective basis; • 80 companies analyzed and 7 acquisitions done and aggressive acquisition guidance to investors ; • Conflict of interest: guidance to investors + short term goals + 1 team accountable • 4 out 7 acquisitions destroyed value so far; Acquisitions timeline 2002 2009 2007 2006 First acquisition (Hardware company) IPO $~80MM allocated to new acquisitions 2006: 2 acquisitions 2009: 5 acquisitions

  4. Background Testing Ideation Source: Accenture, 2006

  5. Elimination funnel and Development Pipeline: assumptions • Scope: Tool for internal process with high impact in the corporation (Acquisitions Funnel); • Product: Acquisition of assets and IT companies • Assumptions: • Limited companies available; • Success of the funnel depends also from external factors: “ the sellers”; • Guidance to investors influenciate the prioritization;

  6. Elimination funnel and Development Pipeline - PROPOSAL Target mapping NDA aklsdjskjskjskljfskljfslkfjdfjkjfdkljfdlkjgkldjglkdjglkdjglkdjgkldjgkldjglkd Approach Financial valuation Investment thesis Due diligence Integration planning Closing

  7. Elimination funnel and Development Pipeline: Roles and responsibilities Marketing HR Finance Operations Legal R&D

  8. Elimination funnel and Development Pipeline: Economic Sub-Thinking Accumulated OPEX (US$ thousands)

  9. Elimination funnel: ideation

  10. Elimination funnel: ideation Segmentation Framework Segment priorization: retail automation penetration x market size Company priorization: market share

  11. Elimination funnel: expansion & surface evaluation

  12. Elimination funnel: detailed evaluation

  13. Elimination funnel: detailed evaluation The Financial Valuation Economy assumptions Financial info • Market assumptions • Economic • Value • Discounted cashflow • Operating assumptions • Taxa de DescontoWACC • PremissasFinancial assumptions

  14. Development pipeline: Cross functional development

  15. Development pipeline: testing

  16. Development pipeline: deployment

  17. How we create value? How integrate? How manage the integration? What HR strategy needed? Development pipeline: deployment • What should be preserved to leverage this deal (sinergies)? • What should be redesigned, adapted and eliminated? • What shouf be integrated immediately? What can we wait? • Absorb, integrate, create or attach? • Which company culture should prevail (Bematech or acquired)? • Does this model applies to the local management? • Who will manage the company post-acquisition? • How do we keep the company performance while we integrate pursuiting synergies? • How aggressive should be the integration? • How do we create the integration team? What is their scope? • What would be the new decision structure of the company acquired? • What will be the cultural impact of the integration? • How do we identify, select and retain strategic resources from the acquired company? • How do we assure the employees motivation during the integration process? Source: Booz Allen & Hamilton (adapted)

  18. Development pipeline: Launch/Post launch review

  19. Conclusions • Methodology: can be applicable to internal NPSD as a leadership and management function • Elimination funnel • “Doing more with less”: increase accuracy and speed through a better screening criteria • A more dynamic elimination process also gives condition to accelerate opportunistic acquisitions ; • Improve criteria on detailed evaluation: finance valuation is the critical point • Development pipeline • Mitigate risks of bad acquisitions: improve approval process (gate keepers) reducing conflict of interest • Ensure commitment and accountability of the teams, specially at the Testing phase (due diligence)

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