PANEL DISCUSSIONMERGERS & ACQUISITIONS
INTRODUCTIONS
Stephen Christian-Michaels CEO, Family Services of Western PA CSO, Wesley Family Services
Doug Muetzel CEO, Wesley Spectrum Services
CEO, Wesley Family Services
Gary Bell Executive Director, Milestone Centers, Inc.
CFO, Milestone Centers, Inc.
Eric Lindey CEO, Partners for Quality
Ann Truxell Executive Director, Vintage
Fred Massey CEO, Familylinks
CONFLICTS OF INTEREST
The Panelist do not have any commercial relationships
There are no conflicts of interest with the material being presented
Earl
y Ph
ase Getting to
Know You
Mid
dle
Phas
e Up to the date of Merger
Late
r Ph
ase Blending of
Cultures/Making a New Culture
PHASES OF M&A PROCESS
TYPES OF STRATEGIC ALLIANCES
CoalitionGroup of agencies
with a common goal
ParentSubsidiary – both organizations are
maintained, but one controls the other
ConsortiumGroup of agencies
where resources are collectively used for a
common aim
NetworkAlliance for agencies
Joint VentureLegally formed alliance
where agencies maintain autonomy
MergerOne entity absorbed
by the other
ConsolidationNew entity formed
STEPS TO STRATEGIC RESTRUCTURING
WHY?Conduct
Environmental and
Organizational Assessment
Determine Criteria of Success
Determine Key Characteristics of
Compatible Partner
WHO?
Find the Partner
Analyze Compatibility of
Culture
Build Trust
Create a Shared Vision and Success
Metrics
Affirm Buy-In to Explore
WHAT?
Organize Exploration
Process
Learn, Confirm, Affirm
Determine Desired Structure
and Key Characteristics
Conduct Legal and Financial Due
Diligence
Finalize Details, Draft
Implementation Plan and Budget
GO/NO GO
HOW?
Sign and File Documents
Build Staff Buy-In
Implement Workplan
Approval
Celebrate, Communicate,
Implement
ARE WE READY TO COLLABORATE?
What do we hope to achieve?
Are the right people involved?
Do we all trust and respect each other?
What will each organization contribute? What will each receive?
Are external factors aligned in support of the effort?
QUESTION:
Where are you all by a show of hands?
Not interested in affiliations, merger or acquisition
Thinking about it
Starting the exploration of possible partners
In the process of an affiliation, merger or acquisition
Completed one or more affiliations, mergers or acquisitions
EARLY PHASE - PARTNERS FOR QUALITY MILESTONE CENTERS
Our StorySearching for a PartnerStrategic Plan Mission FitFinancial Strength
EARLY PHASE - PARTNERS FOR QUALITYMILESTONE CENTERS
What are the Business Models Utilized
Type of Culture
Communication
Board Involvement
How were Early Efforts of Affiliation Funded
QUESTION
What do you think some of the difficult vendor relationships might be or were?
MIDDLE PHASE –WESLEY FAMILY SERVICES
Our Story
Communication and Engagement of Leadership/Staff
Culture Assessment
MIDDLE PHASE –WESLEY FAMILY SERVICES
Board
Due Diligence begins
Planning
Merger Expertise
MIDDLE PHASE –WESLEY FAMILY SERVICES
Developed merger planning committee structure
Corporate Structure
Leadership structure developed
Decision Process
MIDDLE PHASE –WESLEY FAMILY SERVICES
Strategy of Growth
Funding
RIF of positions
MIDDLE PHASE –WESLEY FAMILY SERVICES
New Entity Board Created
Both agencies were voted to be entered into the new entity on 6/29
Merger official on 7/1
QUESTION
What do you think some of the difficult staff issues are going to be or were?
LATER PHASE – FAMILYLINKS/VINTAGE
DONE …
BUT NOT OVER
EXPECT CONTINUED CHALLENGES
EXPECT CONTINUED INVESTMENT
COMMUNICATIONS
STAFF SUPPORT
SYSTEMS
BOARD
MISSION & STRATEGY
POLICY & PRODEDURE
CULTURE
IT’S NOT QUITE TIME TO DO THIS
POTENTIAL PITFALLS OF MERGERS
Getting CEO’s to support the merger –what are their roles, someone leaving, new roles
Boards – fear of giving up tradition, - losing community reputation
Lawyers driving process
PAIN POINTS Selection of Electronic Systems
Selection of New Work Process
Changes to Benefits/Brokers
Administrative Staff Reduction
Changes in Administrative Position/New Structure
Moves of Staff
Not going to reduce significant costs right away,
but you need to improve margin within three years
LESSONS LEARNED –PARTNERS FOR QUALITY MILESTONE CENTERS
• Don’t let lawyers drive the due diligence process• Identify outside support (consultant) early• Take time to get comfort level, but keep pushing• CEO’s – identify key staff member to assist
LESSONS LEARNED – WESLEY FAMILY SERVICES
Assign Merger Specialist/Coordinator
Involve Leadership/Staff
Develop Implementation Teams
Virtual Document Room
Early Engagement of the Board
LESSONS LEARNED – FAMILYLINKS/VINTAGE
Manage the expectationsCommunicating internally and externallyThe process takes resourcesKeep your Mission at the forefrontWatch your assumptions. Purposely schedule a debrief post merger
SYNERGIES OF MERGER – PARTNERS FOR QUALITY VALUE TO THE COMMUNITY MILESTONE CENTERS
Development of Best Practices
Opportunities to cross refer to existing programs
Sharing of professional staff (psychiatrists, psychologists)
Opportunities for joint programming
Create economies of scale for back office functions
SYNERGIES OF MERGER – FAMILY SERVICESVALUE TO THE COMMUNITY WESLEY SPECTRUM
Improve functioning of Outpatient Expansion of Autism Services Consultation across Autism/Intellectual Disability Expand Transition age service specialty Growth/expansion into more counties
SYNERGIES OF MERGER – VINTAGEVALUE TO THE COMMUNITY FAMILYLINKS
New headquarters and a historical asset
Valuable infrastructure support for the subsidiary
Economy of scale savings
Positive messaging
QUESTIONS?
ORGANIZATION WEBSITES
Partners for Quality: www.pfq.org
Milestone Center, Inc.: https://www.milestonepa.org/
Vintage Senior Services: http://www.vintageseniorservices.org/
Familylinks: http://www.familylinks.org/
Family Services of Western PA: www.fswp.org
Wesley Spectrum: www.wesleyspectrum.org
Wesley Family Services: www.wfspa.org
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