{Post-Merger Integration.}A higher return on experience.

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“ Success comes from a full dose of strengths, not a lack of faults.”

- Frank Moran

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IntroductionWHAT IS POST-MERGER INTEGRATION?Post-merger integration (PMI) refers collectively to the processes and activities initiated after an acquisition or a merger to combine two companies into one, with the goal of providing enhanced value to shareholders, employees, and customers.

COMMON INTEGRATION GOALS• Achieve cost and revenue synergies

• Preserve and grow sales and market share

• Enhance technology, systems, and product portfolio

• Streamline operations and manufacturing

• Align business processes

• Establish a corporate culture and acquire human capital

• Manage the integration budget to realize ROI

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Plante Moran Integration Methodology

Project is initiated and strategic planning for the integration commences. The team works with key stakeholders to finalize the integration goals, objectives, and scope as well as the program management office (PMO) and integration team structure.

Project is officially kicked off with key stakeholders. Integration teams develop their team charters and project plans, which are typically built around Day 1, 90, and 120 milestones. Communication and risk management plans are also established.

Integration work begins according to the established project plans and milestones. Teams conduct current-state assessments of each organization to drive end-state development. Transformation of the organization, business processes, and technology occurs, often in phases, ultimately leading to the new end state.

Monitoring of integration performance occurs simultaneously with the other phases of the project. The PMO will utilize the milestones and key performance indicators (KPIs) to track, communicate, and resolve issues and roadblocks to ensure a successful integration.

MonitorPlan ImplementOrganize

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Organize • Define integration goals and objectives• Identify key stakeholders• Establish PMO and integration team structure• Identify and assess synergies

Plan• Conduct project kickoff• Create integration team charters• Develop integration project plans and establish Day 1, 90, and 120 milestones• Deploy standard tools and templates• Establish communication plan, protocols, and cadence• Conduct risk assessment and develop mitigation plans• Launch change management process• Complete organization planning• Finalize synergy targets

Implement • Conduct current-state assessment and gap analysis for both organizations• Optimize and integrate key functions and technologies• Complete organization integration• Develop and execute communication, training, and roll-out plans for end-state models

Monitor • Establish regular status and open issue reporting• Implement integration team and overall program dashboards• Define issues, roadblocks, and mitigation plans• Conduct regular PMO, stakeholder, and executive reviews• Monitor synergy metrics — actual versus target

KEY ACTIVITIES

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Balancing Resource DemandsManaging finite resources is critical to ensuring you strike the right balance between your day-to-day operations and PMI activities.

Integration

Day-to-Day Activities

Resource Management

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Critical Success Factors of PMI

Program Management Office (PMO) Structure and Approach

Sales and Cross-Selling Initiatives

Find out how Plante Moran can help.

Business Processes and Technology Optimization

People and Culture

Communication and Change Management

Deal Objectives and Synergies

Day 1 of Merger

Global Operations

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Deal Objectives and Synergies

• Refine objectives of merger and integration

• Update expected synergistic improvements

• Focus diligence on key assumptions, deal drivers, cost savings, and revenue opportunities

Translating the deal objectives, synergies, and high-level vision into tactical advantages for the merged company is paramount to integration success. This allows the team to validate the underlying data that support the key assumptions surrounding the deal.

Plante Moran’s operational and financial diligence experts are available to supplement your team as needed. The breadth and depth

of our industry experience provides a real-world perspective on the people, processes, and practices of the target company.

KEY ACTIVITIES

NOTES

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Day 1 of Merger

• Develop detailed Day 1 communication plan and timeline

• Define Day 1 organizational reporting structure

• Immediately implement actions necessary to support business post-close

• Comply with legal and regulatory protocols and requirements

• Develop business continuity plans

Day 1 is the day after the two companies are officially combined. Proper planning for this event is critical to be ready to run the business, from both a legal and compliance standpoint, and it allows your company to “get out of the blocks” quickly so the necessary integration work can commence.

It is also the first chance for leadership to speak specifically about integration activities and to begin setting expectations for key stakeholders to promote the benefits of the integration.

The Day 1 event and preparation activities can vary greatly depending on the complexity of the merger, the amount of time to plan, and the Day 1 expectations of senior leadership. In any merger, the number of details to execute on Day 1 can be overwhelming, yet each detail is integral to the success of the integration.

Having a partner with extensive merger experience and who recognizes the importance of Day 1 is invaluable. The Plante Moran

team has planned and executed Day 1 activities in a variety of PMI projects, and we can support plan development, communication, and implementation.

KEY ACTIVITIES

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• Sales & Marketing Plan

• Integration Plans

• Gap Assessment

• Technology Alignment

• Change Management

BEFORE & AFTER ACTIVITIES

AFTER Day 1• Day 1 Reporting

Structure

• Legal Structure

• Announcement Day

• Communication Plan

• Integration Kickoff Planning

BEFORE

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PMO Structure and Approach

• Implement a methodical PMO structure and approach

• Develop and implement Day 1 and future-state integration plans

• Ensure integration teams operate cross-functionally

• Standardize tools and templates

• Manage project teams to ensure accountability

• Sustain employee engagement during the integration

A robust PMO includes a structured approach and standardized methodology and tools. These provide direction and control, allowing the seamless planning and execution of integration activities while minimizing business risks.

The PMO can manage the communication flow and cadence among management and integration teams, which will provide a transparent feedback loop and unified direction for the company.

Our approach is to work with your organization to develop a tailored PMO construct that includes the integration

teams and management. Plante Moran can carry much of the project-management load, thus leveraging your employees’ unique expertise to maintain the existing business and only participate in the PMI as needed.

KEY ACTIVITIES

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Human Resources

Executive Management

INTEGRATION TEAMS

SUPPORT TEAMS

PMO Integration subteams may be created

New Product Development

Operations and

Distribution

Communication

Culture and Change Management

Legal

Information Systems

Regulatory and Quality

Sales and Marketing Other

ManagementPMOIntegration Teams

Project Managers

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Sales and Cross-Selling Initiatives

• Protect at-risk accounts and customers

• Identify cross-selling opportunities

• Define new sales territories and responsibilities

• Establish and align sales management teams

• Solidify strategy for brand equity and brand identity

• Rationalize the combined intellectual property (IP) pipeline and product portfolio

Preserving current revenue, market share, and customer relationships are top priorities, as is accelerating sales growth through the cross-selling opportunities presented by the combined product portfolio.

The uncertainty that accompanies an acquisition brings competitive risks to the customer base and key members of your sales group; it is imperative to establish the go-forward sales team and combined brand identity as soon as possible.

Plante Moran’s tools and processes can be deployed early in the integration to give your sales team an advantage

in protecting current sales and capturing new business.

KEY ACTIVITIES

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Region 1

Region 2

Region 3

Region 4

Region 5

Region 6

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Business Processes and Technology Optimization

• Establish a baseline of current business processes and technology platforms at both companies

• Identify best-in-class processes and technology

• Develop a roadmap to align (and where possible, to transform) business processes and technology platforms

• Identify and evaluate risks related to technology obsolescence, external security threats, and government compliance, where applicable

• Streamline non-value-added processes

Capitalizing on the opportunity to enhance to best-in-class processes brings immense value to the combined organization but will be a complex undertaking. There may be thousands of practices and procedures to consider, and systems are often incompatible.

Moreover, business processes and technology are not mutually exclusive analyses. They must be considered together to ensure that they can support each other in future operations. Having integration teams follow a standardized evaluation process results in decisions concerning the future state being made based on facts instead of opinions.

Plante Moran can help facilitate process mapping and gap analysis to create a roadmap to transform processes and

technology. We apply a holistic approach to ensure the technology platforms integrate seamlessly with the business processes.

KEY ACTIVITIES

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Global Operations

• Day 1 sales and operations planning (S&OP) implementation event to coalesce associates and sites and establish the path to coordination

• Assess manufacturing locations and align them to the global operations strategic plan

• Develop an interim control addendum to the quality system

• Stabilize and mitigate risks to the supply chain

• Optimize facility operations to realize positive variances

Preservation of supply from both organizations is crucial to sales and revenue protection, and assurance of customer service fill rates. During integration, disruptions in the supply chain may result in stock-outs and deterioration of customer expectations.

The development and implementation of a regulatory strategy through an interim control quality system mitigates the risk of regulatory and quality noncompliance. Operating with uncoordinated quality systems may result in compliance gaps and increased exposure to regulatory actions.

Global footprint facility coordination and optimization is fundamental to PMI strategy. Failure to achieve cost reductions in labor, material, and overhead can result in eroded margins, poor operational synergies, and broken covenants.

Plante Moran brings an average of 22 years of industry experience per consulting associate in manufacturing, regulatory

compliance, and supply chain management to help formulate strategy and implement tactics to optimize your global operations.

NOTES

KEY ACTIVITIES

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Communication and Change Management

• Develop tailored communication plans for internal and external stakeholders

• Create a detailed timeline for announcement day and Day 1 communications

• Design tools and metrics to manage change and monitor progress

• Proactively monitor how changes are affecting business processes and employee morale

• Communicate frequently, consistently, and effectively

The disruption caused by a merger leads to questions from all corners, and the flood of inquiries can be overwhelming. When a company is not adequately prepared, it is immediately evident. The risk to the merger’s success and the organization’s reputation and brand can be significant and long-lasting.

At its fundamental level, integration is about change. Without a structured change-management process to proactively monitor and address changes, and without accountability to management, the integration can face unnecessary risks.

At Plante Moran, communication and change management are core competencies that are embedded in everything we do. We

can help tailor and implement detailed, consistent communication plans throughout the lifecycle of the PMI. Likewise, tools and metrics for monitoring change and progress can be leveraged regularly until the integration is complete.

NOTES

KEY ACTIVITIES

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People and Culture• Identify high-potential employees and

assess key competencies

• Develop and communicate the new organizational structure

• Define retention strategies

• Determine cultural vision and messaging

• Begin establishing culture on Day 1

Identifying and retaining high-performing employees is a value-driver for organizations during normal business operations, but even more so during a merger. For most employees, this is a time of high stress; quickly establishing processes to retain key employees is imperative.

The integration also provides an opportunity to enhance or reinvent corporate culture. Understanding the differences between the two cultures and communicating the company’s key values can impact how employees communicate within the organization, make decisions, and treat stakeholders.

Plante Moran can leverage our team of experts and proprietary tools to help you assess and retain talent and institute your cultural vision.

KEY ACTIVITIES

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Experience the Plante Moran DifferenceEXPERTISEProject management is a core competency and primary service we provide to clients, but we also have a team of professionals with a wide array of experiences and expertise in PMI to support and serve you. They will ensure the proper balance of perspectives are brought to you during both planning and executing.

APPROACHYou can rely on us to step in at any point of the process and provide, when and where you need them, the right technical resources and services to support your goals and the workflows to best meet your needs.

PRAGMATIC SOLUTIONSManaging the integration of an acquired company requires addressing both “hard issues,” such as IT and quality systems integration, and “soft issues,” such as key stakeholder communication, retention plans, and change management. We will help you develop and implement a solution-based integration plan that is both comprehensive and actionable.

UNIQUE CULTUREPlante Moran has a unique culture compared to other service firms. You get the best of both worlds: the resources and capacity of a large consulting firm and the client-service orientation of a boutique consulting firm. From our no-surprises, collaborative methodology to our immediately accessible subject-matter experts, we ensure our clients remain satisfied at the highest level.

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THE PLANTE MORAN DIFFERENCE

KEYS TO SUCCESS

Understanding and Respecting Priorities

Recognizing and Addressing Unique Challenges

Knowing Each Client is Unique

Talented and Committed Staff

Industry and Technical Expertise

Full-Service Firm Approach

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“ Insanity: Doing the same thing over and over again and expecting different results.”

- Albert Einstein

PLANTE MORAN

27400 Northwestern Highway Southfield, MI 48034 | 248.352.2500

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