I graduated from Lancaster University in with a degree in Management and, not knowing quite what I wanted to do in my career, decided to join the EY Advisory Graduate scheme to get experience working ...
Hollie McCloy, Consultant
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You have acquired a business... now what?
Home > unspun > unspun 37 - Demystifying Blockchain > You have acquired a business... now what?
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 for help.
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, in 2017, was in talks to buy CVS Ltd, its largest rival in the UK. CVS was not only bigger than Altus UK 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 scrutinised internally and externally. For global CEO Robert Courteau and UK President - Expert Services, Alex Probyn, success was vital.
Altus recognised that to realise the full potential of the deal it would need outside advice. It wanted to design and build a new combined UK business that would achieve more than just the sum of the legacy Altus UK business and newly acquired CVS. There were significant implementation risks, both financial and reputational. The Altus brand could be negatively affected if the design and build of the new business was not delivered successfully. Altus asked Berkeley for help.
Before and during the acquisition – getting to day one
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.
An objective assessment – making sure we really knew each business’s strengths and weaknesses
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 coloured 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.
The future blueprint – designing the new business
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, organisation, 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 you have to make, in an objective and analytical way, working towards a clear blueprint for the future business.
Implementation – turning two businesses into one
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 organisation 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 organisations 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 industrialised 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 organisations 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 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, rationalising systems and processes and more. Most importantly, it achieved its mission to create a new business that took the good parts of two legacy organisations, 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 organisation. 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.
"Working with the team at Altus has been a delight, and we are thrilled to see them go from strength to strength."
If you would like to hear how we can help your business, please don’t hesitate to get in touch by contacting either Tom Parkin or Tim Wardrop.
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