Achieving success with Post Merger Integration (PMI) using Digital solutionsFEBRUARY 2016

SUDHIR SWAMY

Contents State of PMI in 2015

Key issues with PMI

Benefits of using digital solutions in PMI

Examples of companies leveraging digital tools for PMI

Case studies

Key Conclusions

Recommendations

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State of PMI in 2015Deloitte survey findings

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Source: Integration Report 2015 Putting the pieces together), Deloitte

People, collaboration and communication present key challenges to successful PMI…

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Source: M&A 2.0 - Avinash Jhangiani (2012)

Digital enablers and tools can help meet the challenges and maximize the benefits of M&A

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Source: M&A 2.0 - Avinash Jhangiani (2012)

Companies have leveraged digital tools to driver successful mergers, in the past…

# M&A instance Sector/Geography

Year Digital tools used for PMI

Target audience

1 Symantec and Veritas Technology/US

2005 Web based app – ‘Applause’ to retain staff

Internal

2 Wachovia and Wells Fargo Bank

Financial Services/US

2009 Social Media – Blogs, TwitterAnalytics – for IT integration

Internal and external

3 Cisco and Pari Networks

Technology/US

2011 Wikis and Digital collaborative tools Internal

4 American Airlines and US Airways

Airlines/US

2013 Social media – Facebook, Twitter and YouTube

External

5 Schneider Electric and Invensys

Energy/Europe

2014 Websites, web ads, Social media – Blogs, Twitter

Internal and external

6 Anthem and Cigna Health Insurance/US

2015 Combined website External

7 Aetna and Humana Health Insurance/US

2015 Combined website Internal and external

8 Trinity Health Healthcare/US

2006-2011

Digital platform – back-end Internal

9 Cigna, Atos, Newell-Rubbermaid

Multiple - Analytics – Social Network Analysis Internal

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Source: Internet research

PMI Case studies

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‘Applause’ to engageSymantec and Veritas

Symantec acquired Veritas Software in 2005

Staff more than doubled from 6,500 to 14,000

Talented staff started getting offers from other Silicon Valley competitors

Symantec introduced Applause that year to boost employee recognition and target its top 15% performers

Using Applause, Symantec staff can congratulate colleagues who go beyond their job description (in a good way) or introduce novel ideas.

In 2011, 81% of Symantec’s staff received some monetary award through Applause.

Source: http://fortune.com/2012/01/26/a-digital-pat-on-the-back-from-the-boss-whats-it-worth/

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Customers ‘join the conversation’Wells Fargo Bank and Wachovia

Wells Fargo acquired Wachovia in 2009 with integration expected to take three years

Wells Fargo became a banking industry pioneer in the use of social media with the launch of a new blog in Jan 2009

Objective of the blog was to keep customers up-to-speed with progress on its merger with Wachovia

Five team members of the integration team including the CEO, John Stumpf, were key contributors to the blog

Wachovia already had a presence on Twitter and used it to promote the blog

Wachovia customers responded with a number of questions about the transition

To ensure an improved online experience for customers, the integration team used predictive analytics to determine whether existing systems could support added traffic and then laid the foundation for the plan ahead

Wells Fargo pulled off probably the largest bank integration of all time. The team successfully completed the work just a few months after the three-year anniversary of the acquisition.

Source: http://www.finextra.com/blogs/fullblog.aspx?blogid=2319, http://www.banktech.com/management-strategies/the-wellsfargovia-blog-social-media-meets-merger-communications/d/d-id/1292533?

"Here we'll share news and information, and you can "join the conversation" and let us know along the way how we're doing and what we can do better to make the transition as smooth as possible.“ –

John Stumpf, CEO, Wells Fargo (2 January 2009)

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Collaborate to integrateCisco Systems and Pari Networks

Cisco acquired Pari Networks in 2011. Pari solutions are used in

the Cisco Smart Services offering

After the acquisition, Pari employees in San Jose and India joined

the Cisco Services business unit

Cisco IT needed to execute the work stream based integration plan

within 30 days

Digital collaborative solutions were identified for the specific

challenges of supporting Pari's India office – Cisco Telepresence,

Cisco WebEx online meetings, Cisco WebEx Connect and Cisco

AnyConnect VPN client

Specifically, the integration team achieved the following goals:

Employee orientation sessions were held on the first day after

the deal closed.

The move to the Cisco Bangalore office was completed on time.

Pari employees joined Cisco Services and were productive

immediately.

Integration was completed in 30 days

Source: Integrating a Corporate Acquisition, http://cisco.com

"From the start of the first day, we had everything we needed to begin working as Cisco employees, "

Kishore Kumar, director of engineering, Cisco and former CEO, Pari Networks.

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Combining energies for a ‘bright future’Schneider Electric and Invensys

French Energy giant Schneider Electric acquired British FTSE 100

company, Invensys plc, in Jan 2014 thus expanding its product

offering to the field of Control Systems, Software and Services.

In Sep 2014, Schneider launched the “better together” campaign,

which was later renamed “ bright industrial future.” The objective

was to address FUD and generate excitement amongst existing and

potential customers

The campaign included a series of web ads and a video. All digital

assets included a call to action driving users to the external landing

page, which resulted in 50K additional unique visitors.

Schneider also ran an Employee social media competition -

#BetterTogetherSE- to engage people and help spread the word.

Employees were encouraged to “Use your personal twitter account

to show us what Better Together means to you”

The campaign resulted in Euro 20,000+ donation for Habitat for

Humanity. Employees from 24 countries participated and there

was a significant increase of brand association after 90 days from

campaign launch

Source: Better Together: marketing lessons from a major acquisition, https://www.behance.net/gallery/24770589/Invensys

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“You are all doing a great job at integrating Invensys with Schneider and as a customer I feel very motivated and excited for the future with this new company.” Customer Quote

Promising ‘Better Healthcare Together’Anthem and Cigna

Healthcare insurer, Anthem’s offered to purchase its rival, Cigna, for USD 54 billion in mid-2015

Shareholder approval came in December 2015. However, regulatory approval is pending

The stated priority of the merger is to leverage scale to provide consumers access to affordable health coverage

Soon after, Anthem and Cigna launched a website www.betterhealthcaretogether.com

The site is targeted at external stakeholders including consumers, employers, policymakers, providers, investors and brokers

Apart from providing FAQs and outlining the benefits to stakeholders, the site also tracks market commentary and digital media coverage, which endorses the merger

Stakeholders can also sign up for regular updates via email.

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Source: www.betterhealthcaretogether.com

Key conclusions How people from two organizations communicate and collaborate with

each other can greatly impact the outcome of a merger

Consistent and planned use of digital tools such as social media, web 2.0, communities, analytics, cloud and collaborative technology, can help maximize benefits of M&A to the business Benefits of using digital tools are many, including targeted information

sharing, personalization, higher audience engagement, faster and better collaboration

Companies across sectors have used an array of digital tools to drive successful PMI programs targeted at internal and external stakeholders

Opportunities to learn from past experiences exist when developing a PMI plan

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Recommendations on aligning digital strategy to key PMI outcomes

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Key PMI Outcomes

Synergy and value capture

Readiness Integration organization Communication and culture

The goal of capturing synergies is to create value—improve operating margins, enhance the balance sheet, and provide shareholder value.

In post-merger scenarios, the parties bring different operational, cultural and organizational differences that managers must be prepared to affront

Companies prepare for mergers by setting up a post-integration leadership team consisting of cross-functional members.

A well rehearsed communications plan is key in PMI: reaching both internal and external stakeholders

Digital strategy Analytical support Leverage knowledgeand learning

Enable collaboration Connect to engage

Use tools to simulate & analyze scale, complexity, and resources, needed to successfully integrate and realize expected synergies.

Provide access to tools that help consolidate information from people, networks, and document repositories

Provide tools and technology to enable seamless team communication and collaboration, globally

Develop and disseminate content to align with the objective and stakeholder. Monitor outcomes

Digital tools and enablers (not exhaustive)

• Big data and Business Intelligence

• Predictive Analytics

• Online surveys• Wikis• Web-based communities

• Social networking• Messengers• Audio/Video conferencing

• Websites, podcasts, RSS• Social networking –

blogs, Twitter etc.

A digital strategy can only enable a PMI plan and cannot be a substitute for it

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Thank You