An Acquisition on a Global Scale – Where Best to Invest

Issue

When one of the world’s largest organisations bought the market leader in one of its core segments much was at stake: the future of tens of thousands of employees, the relationship with thousands of customers and the need to demonstrate to several bourses that the transaction was a success.

Engagement

A small consulting team from Morgan Hill began working with senior executives of the acquired organisation immediately the acquisition was finalised. The purpose was to install a framework for delivering against the targets that had been set as part of the acquisition. The Morgan Hill Financial Model was used to help create a list of potential IT integration investments that would rapidly weld the two organisations together and begin to release some of the synergy value associated with the transaction.

The Morgan Hill Financial Model was calibrated with the financial ratios to be used to measure progress and calibrated with specific divisional synergy targets. Using the model the team was able to prepare different portfolios of investments, together with recommendations for consideration by the executive. These portfolios balanced risk with return. By using the model to conduct the investment analysis process an optimised portfolio of investments was able to be ranked by value and risk. In addition, by using the model the team was able to identify the prime measures needed to track each investment through to completion.

Once configured the Morgan Hill Financial Model was implemented within the Global PMO and used to produce regular executive reports on value (synergy) at risk within the key integration portfolio of projects.

Outcome

The IT integration programme exceeded its synergy targets. The Global PMO has implemented parts of the Morgan Hill Financial Model into its enterprise project management software, Planview.