Tuurlijk kunnen formele samenwerkingen werken....

Infosupport/JdG/20090420

Source: 2

Samenwerkingen en fusies in zorg zijn een hot topic

Internet

In 25 jaar zijn er 86 ziekenhuisfusies geweest

Source: 3

Index

Formal cooperation: failure guaranteed?

A model for succesfull cooperations

Source: 4

Acquisitions are aimed at creating extra value though post-acquisition synergy

Company A

Company B

Company A

synergy

Cost based synergies

New total cost are reduced by realising economies of scale and reduction of duplicate activities

Example: - Spreading fixed cost like R&D and promotion over more customers - Reducing administration, ICT etc

Benefit based synergies

The combination shares competences which facilitates extra revenue or access to new segments

Example: - Access to new geographical segment - Access to distribution channels - buying new eCommerce capabilities (Achmea)

Main reason

Source: Capron

Source: 5

A corporation can diversify either vertically or horizontally

Current business

Buyer business

Supplier business

Competitor Related business

Unrelated business

Forward vertical integration

Backward vertical integration

Horizontal expansion

Related diversification

Unrelated diversification

Source: De Wit & Meyer

Source: 6

Today we focus on formal forms of cooperation

Venture Form Model

1:1 Agreement

Network

Contract

Joint Venture

Merger

Acquisition

Direction

Intended synergie

Cost

Benefit

The initiative should match strategic intent with form, direction and synergy

Source: 7

Research consistently shows that results don’t meet management’s expectations

Sources: Capron, Douma, Porter

Improvement of joint results

Source: 8

Just over 50% of the new ventures last at least 5 years

Sources: Douma, Capron, Porter

Source: 9

The selection of the right candidate, but especially the failure to integrate are the reasons for not succeeding

Reasons CEO’s state for not creating (or even destroying) shareholder value

1.  Failure to integrate the new venture into the corporation

2.  Selecting the wrong candidate

3.  Price for acquisition was too high

Source: BCG

Source: 10

Index

Formal cooperation: failure guaranteed?

A model for succesfull cooperations

Source: 11

Succesfull cooperations start with strategy, manage their formation process and manage the integration

The Essence Consulting

Succesful cooperations

Manage integration

and synergie

Start with a strategic

vision

Manage the

process

- Define the desired synergie based on your strategy -  Select a partner who matches the desired synergie - Set up a sound strategy for the new venture

-  Use a experienced, balanced deal team -  Set up main principles quickly, but work out the details thoroughly

-  Focus on the integration -  Set up a post acquisition project that ensures synergies are realised

Source: 12

Start with a strategic vision to ensure that your new ventures matches your strategy

The Essence Consulting

1 2 3

Strategy

Desired synergy

Eg low cost > adv. of scale

Start by defining what the needed synergy is to realise your strategy

Desired synergy

Potential Potential

?

When selecting the partner focus on the desired synergy. Don’t fall for ‘the smoothest process’

You Partner

NewCo

Strategy

After selecting start with defining a sound strategy for the venture. Ensure that your desired synergy is the basis for the businessplan

DO: WMO kantoor

DON’T: Thuiszorg megafusie

Source: 13

Use an experienced and balanced deal team

M. Zollo, The Essence Consulting cases

Nr of acquisitions

Suc

ces

Experienced deal teams have a much higher change of success

Business expertise

Process management

skills

M&A expertise

The deal team should combine business, M&A and process skills

KZN case iTouch case

Source: 14

Set up the main principles quickly, but work out the details thoroughly

Zollo, Harding, Taulli, Essence cases

Cooperation set up process

Business plan

Share-holder agreement

No details.. “We agree on the main principles, let the experts work out the details”

Details and more details “let’s start with article 1.1.1 definitions”

Cooperation process lay the foundation for long term performance

Unsuccessful start or even broken off process

Flaws in decision structure, synergy not realised or too high priced

CASE: HbH thuiszorg joint venture

CASE: iTouch

“Set up the main principles quickly, but work out the details thoroughly “

Source: 15

Only in a limited number of cases cost advantages were actively pursuit…

% of companies who reported to have actively reduced means after acquisition

Strangely enough are cost advantages only limited pursuit

In most cases potential cost advantages must be available (fixed cost, processes etc)

Most acquiring companies are not pursuing post-acquisition cost advantages

Source: Capron

Source: 16

‘A marriage is worth more then just the wedding’ (focus on integration and realising the synergies)

Hapeslagh, Capron, M. Zollo

Cooperation set up process

Business

plan Share-

holder

agreement

Integration phase Going concern

Phase where you design the venture and possible synergies

Phase where you REALISE the intended synergies

Set up an integration project headed by a senior manager

Plan a ‘sweep project’ where you ensure that the remaining unrealised synergies are realised

CASE: Argonaut