Catching the M&A Wave

A recent article in the December 8th issue of Globe & Mail reports that BMO is seeing a boom in mergers in the coming year.  If you are one of the fortunate Canadian companies predicted to expand your operations or buy out a competitor in 2011, improve your chances of success through an effective due diligence process.

An effective  due diligence process in terms of human capital must be complete with distinct action plans in both the pre and post merger phases. There are a number of factors to consider when going through the process:

  • the skills and competencies of the current staff
  • employment contract commitments
  • status and obligations around disabled employees such as WSIB and LTD claims
  • labour relation contracts
  • current compensation obligations including base and incentive pay
  • long term retirement savings programs
  • outstanding Ministry of Labour health & safety orders
  • outstanding employment litigation such as Human Rights
  • Employment Standards or wrongful dismissal claims
  • and of course the unwritten side deals which exist in many organizations

[/listdot]Once the merger is finalized the people who come with it can be the most valuable asset if the purchasing organization leads the merger process with this philosophy in mind.

People are the ones who design and produce products and solutions, who hunt and farm for new business, who ensure clients get what they order, and who pay the bills.  In return they expect, at least,  fair pay,  a good place to work, and as much security as a job can offer today.  Part of that security encompasses knowing what is going on particularly during a time when their employment is at risk.

Successfully integrating two cultures demands a focused change management program. Communication strategies need to be developed for the new employees as much as strategies for new clients, partners and suppliers.  Staff are entitled to know where they will fit into the new organization and how their role, reporting relationships, compensation, benefits and working conditions will  change.

Mergers are complex and require the expertise of a skilled integration team. Ensure your integration team includes a human resource expert with M&A experience.

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