Corporate Growth and Value creation through M&A, partnerships, and Innovation

1. © IBT, Los Angeles, California, USA
M&A and Integration puzzle
and
Products, Programs & Innovation Portfolio Management
Sample Document – June 2017
Sandeep (Sandy) Muju

2. Enterprise Value Creation and Sustainability
Driving Business
Growth
Innovation &
Execution
M&A, Partnerships,
Business Strategy &
Portfolio
Management
Global
Sourcing
& DFx
Full Lifecycle NPI &
Technology
Commercialization
Market
Feasibility
Testing &
NPI
M&A and
Partnerships
© IBT, Los Angeles, California, USA

3. 1.0 M&A and Integration Puzzle:
creating value in-organically
Contents
2.0 Corporate Portfolio Management:
sustaining value creation organically

4. 1.0 M&A and Integration
Pre-deal
analysis
Due diligence
and contract negotiation
Pre-close planning
and integration launch
Portfolio Hold Period
( 3 to 5 years typical)
LOI/Term Sheet Sign / Announce Close / Day 1
Control and stabilize Capture and create valueFinalize financial plan of record
• Revise key model
assumptions based on
diligence findings
• Estimate synergies
• Finalize deal terms
Develop preliminary
Target Operating Model
• High-level decisions
regarding products,
customers, distribution, IT
and operations
• Estimate key integration costs
• Identify key personnel to
retain
Develop detailed
Target Operating Model
• Perform confirmatory
synergy analysis
• Detailed future
organizational
design, plan,
execution strategy
and performance
measurements for
combined business
Characteristics:
• Developed and
communicated early
• Clear and
unambiguous
• Cross-functional
Build integration foundation
• Integration strategy and
guiding principles
• High-level roadmap
• IMO capabilities, structure
and tool set
• Communications plan
Refine and launch IMO
• Prioritize Day-1
mission critical
requirements
• Day-100 planning
• Identify “quick wins”
and “keep list”
• Ongoing
communication
Post Deal Integration Phase
•Strategic
rationale
(the 9 C’s)
•Key value
drivers
(12 Metrics)
•Preliminary
financial
model
•Transaction
structure
Completecriticaloperating
tasks
Day1communications
Execute the Day 100 Plan
• Operations / back-office
/ facility integration
• Implement required post-
close control actions
Perform Day 100+ planning
• Begin execution of
detailed integration plans
Roll out the operational plan
• Implement new operating
model
• Align skills with key
integration activities
Post Deal Business Value
creation
• Transform to new
operating model
• Complete workforce
transition
• Manage country and
regional differences
• Implement, track and
monitor integration plan
and value capture
initiatives
• Operational efficiency
and increasing operating
margins.
• Working capital,
Inventory and Cash flow
optimization
• Sustainable growth
strategies (a) for existing
products/services, (b)
for existing markets/
customers
Ensure business continuity
Execute “quick wins”

5. Post Deal: Portfolio Company Value Enhancement
through “Operational” improvements
Working Capital,
Inventory, Cash Flow
Improvement
Operational
Efficiencies, Operating
Margin Improvement
Growth – New
Markets/Customers,
New Products/Services
Sustainable Business
Value Enhancement
Pre
Buyout
Phase
Sell
Phase
Portfolio Hold Phase (3-5 yr period) – Enhancing EV/EBITDA
…….
…..
…….
…..
…….
…..

6. Working Capital, Inventory, Cash
Flow Improvement
Lean Enterprise
Operational streamlining,
Cash-flow improvements,
Inventory - JIT, VMI
S&OP/SIOP/IBP
Cash Flow
Operational Efficiencies, Operating
Margin Improvement
Value Stream Mapping
Supply chain and sourcing
Cost reduction strategies
Spend Analysis
Profitability Analysis
SG&A Analysis
Profitability (Cost)
Growth – New Markets/Customers,
New Products/Services
New products
NPI/IPDS, PLM, PMO, BPM,
Technology planning, New
product portfolio balancing
New markets
Marketing processes,
Sales incentives structure
Adjacent markets
Globalization
Revenue (Growth)
Organizational
Development & IT
Organizational Assessment,
HCM Best Practices,
Organizational Design,
Employee Engagement
IT infrastructure assessment
& improvements
Human Capital and IT
Infrastructure
Enterprise
Value
Post Deal: Portfolio Company Value Enhancement
through “Operational” improvements

7. Gain visibility on the projects portfolio
Align the innovation investments with stakeholder objectives
Make the right choices when prioritizing investments and projects
2.0 Corporate Innovation Portfolio Management
Improve ability to execute on innovation value generation
Organic Value Creation & Management Approach

8.  Project information is hard to collect
◦ No standardized way to document projects
◦ Incomplete documentation
◦ Non-centralized information
◦ Projects at different stages of their life cycle
 Inadequate portfolio view
◦ Project investments are unorganized No
framework, no tool, no time, no resource
◦ Too many projects or information to analyze
◦ Programs reflect capital authorization instead of
logical sequencing
 Ineffective communication about the
portfolio
◦ Business is not interested
◦ Unsure about what to communicate
◦ No clear executive view of the portfolio and its
business impacts
◦ Unclear strategy execution
Gain Portfolio-wide Visibility into Projects
The issues The propositions
A simple format to
collect project
information and to
guide project
managers about
what to document
A logical grouping of
initiatives in a
project-program
portfolio hierarchy
A single view of current
and proposed portfolios
(which projects, when,
at what cost, for what
purpose) highlighting
financial & non-
financial benefits, risks,
and payback periods
Project
B
Project
C
Project
D
Project
A
Program
1
Program
2
Portfolio
Project
E

9.  Project value is hard to define
◦ Unable to scope projects to deliver optimum
value
◦ Can’t measure where the portfolio will have
the most impact on value
◦ No link between portfolio and share price
 Project performance targets are not
specified
◦ Measurement is different for each project
◦ Hard to capitalize on project process maturity
◦ Too many variables (or inconsistent variables)
complicate comparison of projects
 Strategic Alignment is unclear
◦ Unable to obtain clear sponsorship from
business (CSD versus BSD)
◦ No clear linkage between corporate strategic
objectives and investment strategy
◦ Can’t identify where the portfolio fails to
support business
◦ Corporate, Business and Innovation group
roles and responsibilities are unclear
Align Investments with Stakeholder Objectives
The issues
Our Objective: improve growth through innovation
Our Portfolio: 65% of initiatives support cost reduction?
(Better start asking questions…)
A standard
framework for
identifying project
impacts on balance
sheet, income
statement and share
price
MAINTENANCE
A clear categorization of
investment types, allowing
alignment to business
objectives (CSD, BSD)
An adapted business case that
reflects project diversity and
enables comparison and
prioritization of projects
The propositions

10.  Projects can’t be compared
◦ Investments underway are not the ones with
the most value
◦ Projects types and benefits are too different
 Project prioritization process is unclear
◦ Business Units don’t participate in project
selection
◦ No common criteria to prioritize projects
 Investments can’t be justified
◦ Politics play a bigger role than business
value
◦ Incomplete or non-existent financial data
◦ Undocumented benefits
◦ Difficult to justify some types of projects
Prioritizing Investments
The issues
A value / risk matrix
clearly identifying
the projects with the
most enterprise
value and the least
risk or complexity
A view of the planned
benefits and their
impact on the
company for the next
several years, which
allows you to control
the portfolio’s
execution and impact
on the company.
The propositions
A1
A2
A3
A4
A5
A6
A7
A8
A9
A10
A11A12
A13
I1
I2
I3
I4
I5
I6
I7
I8
O1
O2
O3
O4
O5 O6
O7
O8
T1
T2
T3T4
T5T6
T7
T8
Low Risk
High Value
Low Value
High Risk
Overall
Benefits

11.  Unable to adapt to changes
◦ Difficult to identify and discontinue troubled projects
◦ Portfolio does not adapt to changing objectives
◦ Business case evolves, but projects not re-assessed
 Lack of comprehensive, continuous view of the
portfolio
◦ Projects have conflicting objectives, timelines,
and priorities
◦ Redundant or overlapping projects with double-
counted benefits
◦ New opportunities at mid-year aren’t considered
 Inadequate integration with the other business
management processes and approaches
◦ Program Management not blended with 6-Sigma
◦ Portfolio management not linked with strategic
planning and budgeting processes
◦ Continuous reviews not tied to PMO
gates/checkpoints
Develop Strategy Execution Discipline
The issues The propositions
A rolling execution process
to monitor and maintain
portfolio alignment with
objectives.
An ability to compare and
prioritize projects of
different length, styles,
status at any stage of their
execution.
A consistent framework to
integrate all rewards
systems, standards,
governance approaches
into Risk/Reward balanced
Value generation.
Monitor Portfolio
Status and
Performance
Identify New
Opportunities
Reprioritize /
Optimize
Portfolio
Policies
and
Rewards
Roles
and
Respons.
Methods &
Approaches
Tools and
Enablers
Organizational
Structure
Deployment
and
Monitoring

12. Determine Most
Relevant Costs and
Benefits for Each
Project Type with
Business Cases
Innovation Portfolio Management Landscape
Portfolio Landscape helps speed-up the journey through every step of Portfolio Management.
Set up
Portfolio
Develop
Prioritization
Model
CollectCollect
ProjectProject
InformationInformation
Collect
Project
Information
AnalyzeAnalyze
PortfolioPortfolio
Analyze
Portfolio
PrioritizePrioritizePrioritize
Project &
Programs
Communicate
& Report
Deploy &
Execute
Portfolio
Monitor
Programs
& Projects
Monitor
Changes
Determine your
prioritization criteria, input
constraints, success KPIs,
performance thresholds.
Collect project data
with standardized
template
Consolidate information
and produce reports to
highlight key Portfolio
and Project data in
support of the
prioritization process
A1
A2
A3
A4
A5
A6
A7
A8
A9
A10
A11A12
A13
I1
I2
I3
I4
I5
I6
I7
I8
O1
O2
O3
O4
O5 O6
O7
O8
T1
T2
T3T4
T5T6
T7
T8
Low Risk
High Value
Low Value
High Risk
Monitor the portfolio
performance
Completed per initiative sponsors
Team Established/
Well Underway
Target Identified
$x$x
$x
$x
$x
$x
Revised Original
Target Identified
Team Established/ Well Underway
Completed per Initiative Sponsors
Translates to a
$x MM annual
run rate
Benefit Tracking Report
Time
EBITDAImpact($M)
FY03 Opportunity
FY05 Target - ΔEP=$200M ΔEBITDA=$330M

13. Contact
Cell: (323) 947-7029
Email: smuju@ibtransform.com
LinkedIn: https://www.linkedin.com/in/sandeepsandymuju/
Sandeep (Sandy) Muju brings a versatile and seasoned techno-commercial leadership background. He believes that
in today’s global environment, effective enterprise value creation needs to not only focus on organic value creation levers
but also explore in-organic avenues to fill-gaps and keep pace with hyper-competitive external environment.
Building on his engineering technology foundation, he brings broad-based experience in business strategy, P&L
financial management, startup/greenfield projects launch, programs (PMO) and technology management, lean six sigma
business process improvements, product marketing and NPI, global operations and supply chain management, M&A and
post-M&A integration, business transformations, personnel management and organizational development. He has served in
senior leadership capacities with Fortune 500 corporations, served in management consulting capacity guiding and
influencing global organizations as large as $60B+ in revenues with 100,000+ employees, as well as has hands-on P&L
experience with mid-sized companies, and high-growth startup and entrepreneurial organizations.
Sandeep “Sandy” Muju