MERGER ACQUISITIONS - Home - RCPA Annual Conference · together is a good idea, ... 10 Working Committees ... FSWP/WS Board Meetings Final vote Mar 10 WFS Intranet Launch Mar 15

w w w . w f s p a . o r g

MERGER ACQUISITIONS

WESLEY FAMILY SERVICES


anticipate the challenges of varying stakeholders

gain awareness of key required due diligence and implementation activities

determine your organization's position for merger or acquisition

Assess readiness to actively pursue strategic alliances including merger

draft a list of next steps to consider strategic alliances including merger

Hopes for our session


What are the basic tools that you use to determine where your organization is going?

Large group exercise


Mission• Let’s look at a few examples

Values• Let’s look at a few examples

Strategic Plan• Review some key categories


What are the basic tools that you use to determine where your organization is going?


What are the things you don’t want to lose by partnering?



For Wesley Spectrum1. Mission voice1. Equity---reputation, outcomes, number served2. Sustainability

For Family Services1. Mission voice2. Reputation in the community3. Outcomes focus4. Recently developed marketing campaign (new logo)



What are the things you want to gain by partnering?





• Do More for More Children,

Families, and Adults

• Be More Effective, Efficient and

Sustainable

• Continue to Innovate in What We

Do and How We Do It


What are trends nationally/regionally/locally?

External


• Region• Grow regional footprint

Would a merger capitalize on the intended trends?

• Certified Community Behavioral Health Center

WS would not be considered as it stands today

Move from “fee for service” to alternative pay arrangements

Build a “full array” that would represent “life span services model”

• Value Based Contracting

This will require addressing “social determinants”—this is why the social service components of our books of business remain important

• Autism Future

Mission commitment to follow kids through early and later adulthood

New revenue streams as IDD funding opens up for autism diagnosis

Adult autism will include work and housing

• Allegheny County

Fully integrate social services and BH

Complex, multi-system clients need full array

FSWP 50% in Allegheny, not seen as larger player


What do you want in the first conversation?

• Senior Leaders• Boards


Wesley Spectrum Family Services

Humility Vision for growthMission passion Focus on qualitySuccessful track record Focus on innovationDream About Added Value Compatibility of missionAppetite for partnerships Ability to partner

What do you want in the first conversation?

• Senior Leaders• Boards


Elephants on the first day……

Who is CEO? What are their goals?

Are boards in position?

Program closure?

Loss of staff?

....they don’t need to be solved


Community/those served added value proposition

Staff added value proposition

Growth added value proposition

Financial added value proposition

Early consideration…..is there added value?


Enhanced services—”more for more”

Financially stable organization to weather the storms of funding volatility

Creative solutions to meet gaps

Business as usual—market leading quality while sustainable!!

What is in it for the community?


Either unduplicated or very “leveragable” complement of services

Innovative culture to better serve kids, adults and families

Avoiding hostile takeover in the future

Career advancement opportunities, 1,000 positions

Financially stable organization to weather the storms of funding volatility

Increased buying power i.e. benefits, utilities

Business as usual

What is in it for me?


Growth added value proposition

• Niche Market – Transition Age Services

• Autism• Expansion to Adult Autism• Dual Dx – Intellectual Disability-Autism

• Older Adult Services Expansion

• Geographic Expansion


Financial added value proposition

• Outpatient services – decrease loss

• Decrease overhead

• Volume purchasing

• Larger voice with payers


If you’re excited about why coming

together is a good idea, due diligence is to

determine if it is not a good idea!!

http://www.nonprofitlawblog.com/mergers-due-diligence-items/

http://www.kedconsult.com/articles-resources/merger-checklist/

Due Diligence

http://www.nonprofitlawblog.com/mergers-due-diligence-items/

http://www.kedconsult.com/articles-resources/merger-checklist/

w w w . w f s p a . o r g*sooner-better, humility/vision/leadership

Top Categories for Due Diligence Review

• Anything _____________ that suggests we shouldn’t merge?

• Phase I—soft due diligenceProgrammatic

Financial

Board*

• Resource expertise to move through due diligence…internally and externally

• Phase II—hard due diligence Licenses and PayersContractualRiskHRQuality/Risk/ComplianceFacilitiesStrategic plan


Top Categories for Due Diligence Review“Structures to do the lifting”

Boards

M&A Committee from each board

Steering Committee—senior managers of each organization

Facilitator

Legal Counsel

10 Working Committees—staff from each organization

Merger liaison—one person to keep progress moving

Project management competencies

Virtual Document Room


Barriers

Transition of State Licenses Transition of Medicaid billing #’s MCO credentialing

Drove decision to phase in mergerSubsidiaries retained for 12-18 mo.New entity with no subsidiaries

February March

Mar 3 Supervisor

Communications / Staff Letter/FAQ’s

Feb 17

Staff Communications

Feb 21

Mailing to Consumers

Mar 27

Mar 15

Communicationsto all remaining

Stakeholders

Mar 30

Feb 15

Temporary Website Landing Page Launch

Mar 17

Merger Communications Timeline

FSWP/WSBoard Meetings

2nd vote

Mar 17

Press Release Issued

FSWP/WSBoard Meetings

Final vote

Mar 10

WFS Intranet Launch

Mar 15

MERGER OFFICIAL

JUL 1

………….July

Follow-up Mailingto Consumers

Jul 6

Supervisor Communications /

Consumer Letter/FAQ’s

Merger Newsletter with Staff Letter included

Announcement of consumer letter mailing in

Merger Newsletter

Mar 17

Feb 20

All Supervisor’sConference Call


Electronic System to integrate:• Electronic Health Records• General Ledger• Human Resources• Fundraising

We both have ADP payroll

Other Decisions:

• Retirement – Third Party Administrator

• Health Insurance Broker and plan year

• Insurance Broker

• PTO/Vacation

DIFFICULT DECISIONS


Funding the Merger• Approached 8 foundations

• Foundations organized 2nd meetings

• Timing of grants challenging

• Built three merger budgets

• Anticipate 3.3 million in grants

• Built cash flow to schedule expenses


Next Steps• Electronic Systems

• Work Processes – pick best in breed

• Policy and Procedures

• Foundation proposals

• Merging committees

• Culture – bringing staff together


2006 Merger LearningsWesley Institute and Spectrum Services

Keep focused on the prize --mission advancement

Something is not as it first appears

Leadership Competency should be the highest priority

First 12 months should be kept simple

Measure impact/success

Competent board leadership increases success

Can’t stop communicating

Stay humble . . . And remember to serve


Process Summary

Strategic Fit Value

Due DiligencePhase IPhase II

Decisions (legal)

Timing


Anticipate the challenges of varying stakeholders

Gain awareness of key required-due-diligence-and-implementation-activities

Determine organization's position for merger or acquisition

Assess readiness of organization to actively pursue strategic alliances including merger

Draft a list of next steps to consider strategic alliances including merger

Hopes for our session

How did we do?


Doug [email protected]

Stephen [email protected]

mailto:[email protected]

mailto:[email protected]

Documents

MERGER ACQUISITIONS - Home - RCPA Annual Conference · together is a good idea, ... 10 Working Committees ... FSWP/WS Board Meetings Final vote Mar 10 WFS Intranet Launch Mar 15