Carrying out post-merger intergration during a restructuring process – is that even possible? If you hire the right interim manager as a CEO then yes, it definitely is!
The Situation
A swedish-norwegian publicly traded corporation acquired an owner-managed company three years ago in order to gain access to the German and Central European markets. Unfortunately, the corporation did not deploy any skills or ressources to integrate the company and essentially left the company to take care of itself. This led to a two-digit negative EBIT and to the CEO resigning. The CEO felt that he was not capable of carrying out the integration of the company into the corporation successfully. The position of CEO was left vacant until Gerd Giese, an interim CEO with vast PMI experience, brokered by HANSE Interim, filled the position.
Description of the Task
Gerd Giese reported the following:
Until I entered the company, the team had been left to itself for almost two years and had developed a certain life of its own, because it did not have a manager.
All processes and structures that the corporation had implemented in its other subsidiaries and that were expected to be implemented into this one as well, were missing.
There was no inventory management software, no business forecasting process, no turnaround strategy, no network within the corporation between the headquarters and other subsidiaries, no certification needed to gain new target customers, inadequate internal processes and a lack of communication between the sales manager, project manager and fleet manager, and an IT-landscape which was entirely different from one at the corporation. In essence, the German subsidiary was a type of black box and a big mess.
There were even talks about selling the company and exiting the German market because the results were so bad.
This particular situation required my expertise as a seasoned turnaround manager with corporations and as an expert for restructuring.
Adjustments and Successes for the Interim CEO PMI
I was responsible for a revenue of over 15 million euros and for managing 40 employees. I directly reported back to the vice president of the corporation in Sweden.
The tasks that had to be carried out were the following:
- Managing the organisation in the turnaround process
- Optimizing processes and procedures in regular business operations
- Ensuring that the 2017 goals were achieved
- Stabilizing the business operations
- Developing a strategy
- Initiating and implementing a reorganisation program
- The annual accounts for 2017 and conducting the necessary meetings with auditors
- Cash flow forecasting and controlling
- Risk management and project evaluation
- Project management: cost control, timeline, calculation scheme
- Sales management: order pipeline, matrix organization, tender business, trading
- Fleet management: capex, time utilization
- Internal audit
- Implementing a business platform (ERP)
- Purchasing, warehousing and HUB operations
- Business review
- Digitalization/digital leadership
- Project team „gross margin improvement“
- Obtain various certificates, e.g. for environmental management and process security
- Implement the prescribed „business principles“ in the fields of sales/projects/fleet. This also included so-called „hand over meetings”, calculating ongoing projects as well as follow-up management
- Budgeting for 2018
- Business forecasting
- Creating a business case including a growth strategy, which had the goal of attaining a turnover of 50 million euros and gaining a market share of 10 per cent within five years.
After making the necessary adjustments as described above, I was able to effectively save about 0.5 million euros in costs and to cut eight full-time positions. Net turnover rose by about 36 per cent and the EBITDA rose by 468 per cent! On top of that, i had initiated a restructuring program and started its implementation.
The Result achieved by the Interim CEO PMI
After 10 months, the company was back to making profits and the team was motivated to carry on. Selling the company was no longer under discussion and the company had been fully integrated into the corporation.
Conclusion
This was a very intensive project, often requiring me to work more than 15 hours a day, but I was able to successfully implement the post merger integration during the restructuring process and now, the new CEO can build on a solid basis.
The results are really something to be proud of!
