Datatec acquired two UK network integration business to boost its UK delivery capacity and market coverage. These businesses had many overlaps. However they had been left alone post acquisition to enable founders to complete an ‘earn out’ and because of objections to merger from some key players, argued on the basis of perceptions of fundamental differences between the businesses. David identified synergies and issues, providing advice on the re-organisation of the businesses and an implementation route map.
David was responsible for analysing the two operations and developing a proposal to take forward a merger. He interviewed key players in both organisations and analysed their business plans and material defining the organisations’ propositions.
David developed a common value chain and used this to identify similarities and differences. This brought at complementary differences – they targeted different customers, sold equipment from different vendors, and one had a small scale manufacturing capability, and common areas – they had similar design and implementation competencies and processes. There were some key differences in propositions – one company selling ‘best of breed’ propositions, the other selling its excellence in Cisco – that were difficult to reconcile. However the analyses indicated a clear rationale to merge and reshape the businesses, and indicated that some of the objections to merger were spurious.
David proposed the creation of a single network integrator, with the manufacture of the niche networking equipment being spun out into a separate company, and proposed an approach to implementing the changes.
Datatec implemented the necessary changes.