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Case Study #1:
How can a public company best manage the risks of a new acquisition?

CLIENT:

Profile: Publicly held corporation in the traffic control industry
Size: $150 million

PROBLEM:

This highly successful, well-respected, publicly held company looked to acquire a struggling legacy manufacturer in the industry. The potential acquisition looked promising on paper, but questions remained about the strength of its engineering department, distribution network, and trust in an eroded brand. The company wanted to know what, exactly, it was buying and to identify any issues that could affect integration, the balance sheet, and share price. The company needed to understand the risks and costs of integration alongside a roadmap to integrate the prospect company, create confidence in the investor pool, and establish trust with key customers, distributors, and vendors in the market.

SOLUTION:

Insight:

CTC formed a VALCORT focus team to get a quick snapshot of the prospect company's growth practices, customer perceptions, and growth potential. The team learned that the distributor network was indeed highly mistrusting, and in fact, held hostage by the company's install-based products in the market. The customer base trusted the company's brand as a legacy provider, but perceived it was out of step with new products and technology solutions. CTC found the company's design and engineering center had been dismantled and essential product documentation destroyed.

Imagination:

CTC recommended the acquiring company CEO jump on a private jet the day of the merger announcement to visit key distributors around the United States to demonstrate the company's ongoing commitment to innovation, and outstanding customer service. CTC also recommended an integration strategy to align conflicting values and vision between the company and the prospect company.

RESULTS:

The company's CEO completed the acquisition, successfully announced it to shareholders, and had day one communication with the acquired company's key distributors that reinforced values, vision, and built trust for the future.

SERVICES: