LCG’s Acquisition Integration Planning and Execution (IMO) practice provides services across the transaction lifecycle for Pre-Close, Day 1, Post-Close and ongoing portfolio improvement. We work with Private Equity, Venture Capital, and corporate buyers to identify technology and acquisition risks, opportunities, and costs that can have a direct impact on the investment thesis, and the ongoing operational and financial efficiency of the business.
Transaction Support: Pre-Close
IT Due Diligence (DD)
A target’s IT landscape may present significant risks, issues, and opportunities to the buyer. The IT DD will investigate all aspects of IT, including business applications, custom applications, infrastructure, IT support, key vendors, IT spend, the IT roadmap and the IT organization. We will inventory all the risks, issues, and opportunities with supporting detail in context of the investment thesis. Additionally, we will create a list of prioritized projects and associated investments for pre-close and post-close consideration. We will raise the red flag on any significant risks and issues as soon as possible so buyers can determine implications to the deal.
Cyber Due Diligence
Cyber due diligence is underpinned by a risk-based approach to identify risks or existing issues that need to be remediated as a condition to the deal closing or as a post-close activity. The cyber due diligence can reveal threats that are deal-breakers, deal-changers, or milder risks that can be prioritized for the longer-term. We will inventory all the risks and issues with supporting remediation detail with associated projects and investments.
SaaS Due Diligence
The SaaS due diligence incorporates our IT DD and places a special focus on SaaS specific capabilities. We deep dive into the following:
- SDLC – processes, tools, governance, agility, throughput, volume, and overall efficacy to deliver
on the roadmap
- Product management function – processes, tools, governance, roles, and ability to steer product strategy and overall roadmap
- DevOps organization – functions, roles, specializations, reporting lines, span of control, workload, and overall organization alignment to business strategy and future growth/scale
- Customer onboarding – processes, governance, and plans to efficiently onboard customers
Acquisition Integration Planning
Integrations vary greatly in complexity from a merger of equals to smaller tuck-ins. Regardless of complexity, certain activities need to be planned for successful post-close integration. An integration strategy and detailed plan is required so all functional work streams and stakeholders are clear on their activities, dependencies, and deadlines. In addition, a governance structure with executive reporting and stakeholder management across the platform, target, and financial sponsor/PEG is needed to manage expectations, accountability, and communications. Integration planning is critical to set the path for efficient integration execution (post-close) and help ensure the financial and operational investment theses can be met.
Carve-outs can be very complicated due to the entanglements of technology, processes, people/roles, data, and assets of the “carve-out” entity and the ParentCo. The “carve-out” typically uses many shared services of the ParentCo that require deliberation on the future operating model and a separation strategy. This sets the stage to build a detailed post-close project plan, Day 1 cut-over plan, risk and mitigation plan, TSA framework, stranded cost analysis, and a governance model with executive status reporting. During post-close, we manage all the separation activities to expedite exiting the costly TSAs as soon as possible.
Interim Office of Corporate Development – Managing the Acquisition Pipeline
We help CFOs/CXOs manage high volume pipelines so they can maintain capacity for daily operations and, as they often do, manage the integration of add-ons. We set up structure, processes, and governance to ensure efficiency and transparency, including:
- Create a master pipeline plan and a per-target milestone plan
- Track priorities and action items per target
- Assimilate all stakeholders into deal teams, including the platform, target, PEG, and third-party vendors
- Manage activities and stakeholders daily
- Hold stakeholders accountable to deadlines
- Develop an “always-on” transparency to status & amp; risks via collaboration tools
- Conduct weekly status calls for all key stakeholders and vendors
Transaction Support: Transition, Day 1 and Post-Close
Acquisition Integration Execution and Integration Management Office (IMO)
Integration execution needs to be strategically and tactically planned, organizationally structured, and governed by the leadership from the platform, financial sponsor/PEG, and target. An Integration Management Office (IMO) is established to fit the needs and level of complexity of the integration and oversee all aspects of execution. This includes the master integration plan and detailed project plans, TSA exit plan, stranded cost management, synergy tracking, risk and issue management, executive status reporting, and stakeholder communications and management. Urgency and accountability characterize the effort needed to expedite an efficient integration to exit TSAs and achieve the target operating model.
Carve-out Execution and Separation Management Office (SMO)
Carve-out execution is complicated and rich with risks and unforeseen challenges. Carve-out execution needs to be strategically and tactically planned, organizationally structured, and governed by the leadership from the platform, financial sponsor/PEG and target. A Separation Management Office (SMO) is established to oversee all aspects of separating the target from the ParentCo. This includes the master separation plan and detailed project plans, TSA exit plan, risk and issue management, executive status reporting, vendor management, and stakeholder communications and management. Carve-outs require proven senior experience and technical expertise. LCG brings this talent to every engagement.
Interim Chief Integration Officer
LCG has senior professionals to play part-time, interim Chief Integration Officer roles. We bring the needed experience to coordinate the integration of technologies, processes, and people into the platform. The scope of these roles varies depending on the velocity and volume of acquisitions for the platform.
Integration playbooks are a repeatable set of processes, tools, plans, and governance for platforms undertaking serial acquisitions. This is most often applicable to PEG platforms or corporate acquirers that have the internal capabilities, resources, and capacity to plan and execute integrations, but lack integration expertise and tools. The playbook will be customized specifically for the platform in context of the typical target size and scale, deal volume, and investment, operational, and financial theses.
IT Assessments give insight into the risks and opportunities of the current state IT landscape. The assessment will gauge the health and direction of technologies, IT vendors, the IT organization, IT governance/management processes, and the IT roadmap. Typically, the assessment is the beginning of a process to improve business capabilities by understanding where IT is deficient in supporting the business and where IT can help optimize the business in the future.
IT Strategy and Roadmap
IT Strategy and Roadmap outlines a comprehensive plan on how IT can support the business and help the business achieve its goals. This is a collaborative process between IT and business stakeholders and is underpinned by the IT strategy delivering new and/or improved business capabilities. The road map outlines specific initiatives, dependencies, sequencing, and timing to deliver the needed business capabilities. Additionally, the roadmap will have details per initiative for budget, scope, key activities, resources, and deliverables.
SaaS Assessments give insights into the risks and opportunities of the current state SaaS environment. The assessment will gauge the health and direction of the DevOps organization, SDLC, ProductManagement function, and customer onboarding processes. The assessment will identify risks, opportunities, and investments needed in SaaS capabilities to align with business strategy, product strategy, and future growth/scale projections. We will provide a roadmap with prioritized recommendations on actions and investments needed in the near-term and longer-term.