case study: Q. complex acquisition? A. smooth transition.

Our client is a blue-chip company whose products and services support the construction industry. The company is acquisitive and Blue Stone has undertaken a number of due-diligence exercises on their behalf. One particular matter proved to be very complicated and is worthy of a case study.

The acquisition was on a particularly large scale as our client was acquiring a large component of one of its major competitors. The transaction would almost double the size of the company overnight. It soon emerged that IT would be a critical factor in the deal planning process.

Our initial investigations soon revealed a very complex web of inter-linked IT systems. There were three main computer systems, all old, on different platforms, in different locations. The original authors of the systems were long-gone and support was tenuous. The three systems were connected together via complex interfaces which were poorly documented and understood. To further complicate matters, the systems were all part of an outsourcing agreement. All of these factors combined together to make the IT elements of the transaction look very risky.

Blue Stone played an active part in the negotiations and were able to assist the buyer to leverage the situation with IT and negotiate a better deal. We worked with the lawyers in the preparation of the Sale Agreement and in particular the content of the Transitional Services Agreement covering how the acquired element's parent and its outsourcer would work with our client to affect an orderly transition.

Subsequent to the completion of the sale Blue Stone managed the IT element of the integration of the two businesses and the rapid transfer from the poorly supported systems of the seller onto the stable platform of the purchaser.

This complex acquisition was a complete success and Blue Stone's played a significant part using its ability to work at various levels within the project, the IT review, price negotiations, contract negotiations, risk mitigation planning, and of course the project management of the IT integration plan.

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