Well-Executed Merger Helps Client Regain Leadership Position
Acquisition reverses a hardware manufacturer's decline and captures billions in savings in 18 months
Our client, a major IT hardware manufacturer, was suffering from slow growth. Although depressed spending on enterprise systems from corporate customers accounted for some of the slowdown, the hard truth was that the company continued to lose share to its major rivals even during the down cycle. Against this backdrop, the client asked Burk to help assess whether a potential merger could yield enough benefits to help the client regain its leadership position, and then to implement a merger plan.
The Burk team of experienced specialists in corporate finance and high tech collaborated to evaluate the strategic options available and confirmed that the merger option had the highest potential to reverse the company’s decline. We then helped the client drive the deal process and ensure that the company captured the deal’s anticipated value.
In supporting the client, Burk teams performed a range of critical functions, such as financial due diligence and detailing the revenue and cost cases. We also conducted a comprehensive cultural assessment of both companies, interviewing senior executives and leading employee focus groups to evaluate objectively the cultural fit and identify any potential organizational barriers to success. Rigorous preclose strategic planning also included:
- Identifying management teams for every division of the merged company
- Outlining a 3-year plan to meet the new company’s goals
- Developing a new go-to-market strategy for sales, distribution channels, and call centers
Beyond these strategic undertakings, the team developed a tactical launch plan for “deal day” that described activities and communications at 15-minute intervals to ensure that the merged entity projected a highly organized, focused company from day one.
From a competitive standpoint, the merger succeeded in both changing the sector landscape and putting the client's major rivals on the defensive. Financially, the deal bore fruit quickly, with the new company capturing billions in savings due to elimination of redundant assets and capabilities within 18 months of closing the deal (the majority of savings was booked a year ahead of schedule). In addition, revenue increased substantially in the second post-merger year, reversing a double-digit percentage decline in the first year the combined company operated.