Unity Bank- Merger And Acquisition

1. Case Name: Unity Bank- Realizing value from an M&A integration 2. Problem Statement The primary question of the case is: Unity Bank has acquired Delta to realize its dream of becoming the World No 1 provider of share registry services. The primary problem is How to successfully integrate Unity Bank and Delta within the specified timeframe and simultaneously achieve the Target savings? The secondary question of the case is: The integration posed multiple challenges but it was critical to infuse the integration without affecting the existing business processes of both companies. 3. Background a. Describe the acquirer company/department 1) History - Unity bank was founded in South Africa in 1982 and employed around 8000 people worldwide and had market capitalization of approximately $2 billion - Provider of global shareholder and employee management services - Manages 60 million shareholder accounts for over 10000 corporations across 12 countries on 5 continents - Unity bank provided full range of transfer agency services including share registry administration etc 2) Conditions - Unity bank envisioned to become the World no 1 provider of share registry services 3) Culture - The bank had a professional workforce - The staff were given incentives and provided innovative projects - IT services of Unity bank were robust and effective. 4) Strengths - Few providers of global shareholder and employee management services - Large customer base - Provided full range of transfer agency services - Ability to manage most complex and largest corporate actions - Professionalism of staff members and nature of their expertise - Ability to attract talented operations and IT professionals and retain them over a long term - Offered professional but family oriented work culture - Strong IT infrastructure providing sizable entry barrier and economies of scale - Robust enterprise system BLAIR... UNITY BANK: REALIZING VALUE FROM AN M&A INTEGRATION EXECUTIVE SUMMARY: Founded in 1982 in South Africa, Unity Bank was one of the few providers of global shareholder and employee management services and other value added services. Unity held more than 60 million accounts for over 10,000 corporations across twelve countries and five continents, employing 8000 people worldwide and a market capitalization of $2 billion. The M&A integration of Delta with Unity Bank in itself was a great step for Unity Bank. The four major areas to be considered during the integration were software, infrastructure, organization structure, and people. The teams task was challenging as it had called for a $60 million saving in two years, nearly half of Deltas current operational expense. The pressure was intense as merging two emerging entities was a huge task. The management was unequipped with plan and was not aware the first area that they needed to tackle. We believe that the integration could be managed by gradually consolidating Delta systems into LEAD, pushing back the deadline by 2 years, creating cash and transition incentives to increase employee productivity and decrease resistance, offer clients discounted rate to retain them and implement a flexible/parallel problem solving approach. OVERVIEW: Unity Bank will have the largest market share in the US after the acquisition of Delta is finalized. This has presented the management of Unity, the company acquiring Delta, with many obstacles. The shareholder employee management services industry has been increasingly relying on advanced IT to handle both the massive volume of shareholders and the complexity of the transactions needed to be processed. Unity is currently faced with multiple conundrums in how to integrate the two companys systems into one mechanism that will allow for economies of scale and high efficiency. The two companys systems are different on many levels that impact flawless...