Support in achieving true integration after they bought their largest competitor
When Altus UK decided to buy its biggest competitor, they had to get the integration right first time. The team at Altus could see they would need expert support and reached out to Berkeley.
Altus Group is a global software and advisory firm for the real estate industry. It offers property tax and valuation advice to people and companies that own, lease or invest in commercial property. Its UK business spans investment and valuation to lease consultancy and business rates.
The UK is a valuable market for the group, which has a long history of buying smaller businesses to grow market share. Altus had been weighing up the possibility of another acquisition and was in talks to buy CVS Ltd, its then largest UK rival. CVS was not only bigger than Altus but also very different both in culture and in operation. This would make it harder to subsume than a smaller company, and Altus foresaw this. The joint company would mean more than a doubling of revenues and workforce size and would be Altus’s biggest acquisition globally for nearly a decade.
Headquartered in Canada and listed on the Toronto Stock Exchange, Altus had to update the market about the deal and the anticipated value it would deliver. The board signed off and projections were shared with analysts, which in turn would affect share price. The integration of CVS would be scrutinized internally and externally. For the global CEO and the UK President - Expert Services, success was vital.
For the first month, just before the deal completed, we worked to get Altus UK ready to double in size overnight. Few people in either company knew about the upcoming deal, and confidentiality was key. We developed a project plan for the run-up to completion and announcement of the deal: our aim was to tell the market, tell customers and employees, and keep both businesses running with minimal disruption. We achieved this, ensuring a smooth transition on day one.
The following six weeks entailed an objective assessment, function by function, of how well both businesses were working. This was an independent health check to determine which components of the two businesses would make it into the new joint company, and where entirely new design would be beneficial instead.
We guided Altus in an impartial way – assessing the sales, operations and support functions of both businesses, always presenting the facts. This gave everyone involved an objective base to build from, one that wasn’t colored by the politics of either the acquirer or the acquired company.
At the end of this phase of work we had a clear understanding of which good characteristics to retain from the two legacy businesses, and where there were opportunities for improvement.
Armed with our understanding of the legacy businesses and a vision for how the new business should operate, we led the future-state design. This determined how the new joint company would approach the market and what its value proposition and pricing model would be.
In doing this, we went back to some basic principles, including what the addressable UK market size is and what our new target market should be. This was done in a data-led, analytical way, working with both Altus’s and CVS’s commercial directors and finance directors, giving us the authority to make clear recommendations for the commercial strategy of the new business.
Having confirmed the detail of the commercial strategy, we could then design the wider operating model – the combination of capabilities, organization, processes and systems that would most effectively deliver the strategy. This was done through an iterative process, involving global executives, UK executives and heads of departments. We collectively worked through the hundreds of discrete choices to be made, in an objective and analytical way, working towards a clear blueprint for the future business.
Having signed off the new operating model, it was time to make the design a reality.
Starting with the front end, the sales pipeline, we merged the two sales functions to create a best fit for the new business. We delivered on the future-state design of where to base these teams, the data they would need and the organization design for the marketing, lead generation, online, telephone and field sales functions.
Following this, we established new operations teams. This included bringing together hundreds of staff across 12 sites into a new regional structure, consolidating offices and introducing common data, systems and ways of working.
Finally, we had to overcome a significant challenge: we had two of every support function – HR, finance, marketing, technology. We moved to one of each, combining the best of both organizations or building new where necessary.
Central to the project’s success was involving Altus’s and CVS’s people throughout. We were with them, in their offices every day, working with the people who would be affected, building relationships and gaining trust.
Altus had a solid reputation as knowledgeable, trusted advisers who were relentlessly client-focused, but their processes and systems were not industrialized to the same extent as CVS's. CVS had a big market share, an industrial-scale sales function and repeatable processes, but a very different working culture to Altus. Keeping the best of both businesses meant the project was as much about changing Altus as it was about integrating CVS.
We listened to the people involved and facilitated the changes needed while maintaining Altus’s values and embedding a new culture in the joint company. We could have imposed an off-the-shelf operating model based on other similar-sized organizations with similar market shares and revenue ambitions. But avoiding any type of one-size-fits-all approach, as we always do, was essential. Such an approach would not have met the brief: to build a new business that maintained the quality of the Altus brand, while delivering sustainable, profitable growth in market share.
"Working with the team at Altus has been a delight, and we are thrilled to see them go from strength to strength.”
Working alongside the Altus leadership meant we created a new executive team and governance model for the business. This process called for some hard-nosed yet empathetic decision-making when designing the ideal team. It is core to the way we work that we understand the human elements of these decisions. We helped Altus look at who was best suited to each role and, importantly, why.
At the end of the engagement, Altus achieved the market share it wanted and grew its margins in excess of its pre-deal expectations. It cut costs through efficiencies – combining back-office functions, rationalizing systems and processes and more. Most importantly, it achieved its mission to create a new business that took the good parts of two legacy organizations, while retaining its brand and strengthening its pre-eminent position in the marketplace.
This project was undertaken by two Berkeley consultants embedded into Altus’s executive team, rather than with a large consulting team that would feel separate from, or outside, the client organization. We worked closely with people throughout Altus and CVS, combining their know-how of the commercial property sector with our know-how of strategy, operating model development, post-acquisition integration and business change.