Mergers & acquisitions case: trade & industry.

Our customer produces, assembles and sells iron products for professional installation of pipes and cables. These products are sold through electrical and mechanical wholesalers in Europe and the USA. The holding company acquired two subsidiaries in the United Kingdom and asked P36 Solutions to manage the merger of the two companies.

The merger consisted of the relocation of staff and one factory, the integration of the two organizations, the implementation of ERP-system and the upgrading of the production facilities. It was essential that all customers and key staff members would stay, that turnover and margins would increase, that sales would continue at all times and that the customer services would improve. Based on a decent plan the project was successfully implemented in 18 months. One interim managing director of P36 Solutions was in charge and guided the organisation through the changes. The result is an organization with a management team with one existing and three new managers, a sales team with technical experts and commercial agents, a production and assembly section and an operations department with an internal sales office and logistics area. Due to sales growth and economies of scale the new company is profitable and has won an international enterprise award.

The holding company was established 65 years ago in the Netherlands and is family owned. It sells a wide range of fixings and components that are used mainly in buildings and utilities, on rail tracks and in ships and on oil ridges. The holding has five production and assembling sites in Europe as well as local sales companies in most European countries and the United States. In 1998 the holding took over a company in the United Kingdom. This company produces a range of standard components for the European market and customer specific fixings. In addition it is the local subsidiary selling the full product range in the United Kingdom and Ireland. Before the merger the customer base was mainly in the mechanical market and the company was struggling to keep the production unit profitable. The newly acquired company was mainly serving the British electrical market and had a assembly line. The acquisition enabled the holding to strengthen its market presence in the UK, to take advantage of economies of scale in production and to introduce a new range of products in other countries. Obviously these opportunities would only be achieved when the merger was a success and all customers and key staff members should stay.

Preparing and planning the merger is the key to success. During the preparation phase the situation was assessed, objectives were defined, targets were set and a project plan was made. At this stage it became clear that the internal processes within both companies differed substantially and that small changes in the system could have major implications. One company daily handled about 15 large orders with pre boxed products, whereas the other handled on average 90 smaller orders that were specifically packaged to customer needs. The process for customer specific made or assembled products took at least a week in one company and a maximum of two days in the other. It was concluded that changes in the internal processes should be step by step and the ERP-system should be adapted in order to maintain customer satisfaction.

  • Mergers and acquisitions
  • Interim management

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