Cathy Hauslein, Senior Vice President, Chief Accounting Officer, Mattress Firm, explored what it takes to develop an effective integration process for mergers and acquisitions in her keynote presentation to Argyle’s CFO membership at the 2016 Chief Financial Officer Leadership Forum: Fall Event in Chicago on Nov. 17. In her presentation, “M&A Integration: Realizing the Potential of Your Acquisition,” Hauslein described how organizations can optimize the value of a merger or acquisition.
Although M&A represent a key growth opportunity, few organizations are able to maximize the value of M&A, which is reflected in recent data.
Hauslein pointed out a recent survey of business professionals dealing with M&A revealed:
- 30 percent of respondents said they were not satisfied with a business’ activities after a merger.
- 20 percent of respondents noted a merger failed to meet or exceed their synergy targets.
- The inability to deal with unexpected challenges was the biggest problem for business professionals during a merger or acquisition.
Ultimately, there are three key factors that business professionals need to know about to ensure a merger or acquisition is successful:
Hauslein noted Mattress Firm recently acquired Sleepy’s as part of its mission to become a coast-to-coast specialty mattress retailer.
“No matter how well you planned the structure of a deal, expect something to happen at the last minute.”
Throughout the acquisition process, Mattress Firm focused on its long-term goal and took the necessary steps to ensure the Sleepy’s addition would help the company achieve this aspiration, Hauslein said. Mattress Firm developed a strategy to streamline the acquisition, and by doing so, was able to ensure the Sleepy’s addition was seamless and could deliver long-lasting benefits for her company.
The consolidation of one business into another company’s operations can be difficult. However, an organization that focuses on synergies may be better equipped to streamline the consolidation process.
For example, Hauslein pointed out Mattress Firm wanted to add Sleepy’s in the hopes of lowering its advertising costs and achieving overhead savings.
“We were trying to get to that next level. … We wanted to get to a footprint where we could use national advertising, which we felt would save us quite a bit of money,” Hauslein stated. “And in most synergies, you’re going to try to look for some kind of overhead savings.”
Mattress Firm understood what it wanted out of the Sleepy’s acquisition, and as such, devoted the time and resources to ensure both companies’ synergies were aligned, Hauslein said.
An organization may commit substantial time and resources to plan for an acquisition or merger. Conversely, problems may arise that can put a transaction in jeopardy.
Understanding unexpected challenges and having a structure in place to deal with such issues can help an organization simplify the M&A cycle.
“You can let the rest of your team continue to focus on the business so that you don’t lose track of what’s going on and you don’t turn around … [and lose] sight of what the business is.”
If an organization can take a proactive approach to unexpected M&A issues, it will be able to overcome such problems without delay.
“No matter how well you planned the structure of a deal, expect something to happen at the last minute,” Hauslein pointed out.
4. Steps for Integration
Developing clear steps for integration is paramount for today’s organizations, and these steps should include:
- Establishing a realistic timeline. Understanding how much time it will take to add a company and integrate it into an existing business can help business professionals plan accordingly. “Set that timeline and really try to stick to it,” Hauslein stated.
- Developing a strategic function for M&A. At Mattress Firm, the organization boasts a dedicated team to ensure a merger or acquisition goes according to plan. This team plays an important role in every merger or acquisition and is able to help the company keep track of a transaction’s progress consistently. “We have a strategic planning function within our team,” Hauslein said. “When we have an M&A going on, [this group] is in charge of the M&A activity. They are providing project planning and project tracking and are bringing together all of the teams to talk about what’s going on.”
- Focusing on the day-to-day activities of a business. In many instances, a merger or acquisition may become costly or time-consuming. Comparatively, this transaction should not affect a company’s day-to-day operations, and a business must be able to remain focused on its customers at all times. “You can let the rest of your team continue to focus on the business so that you don’t lose track of what’s going on and you don’t turn around … [and lose] sight of what the business is,” Hauslein noted.
Having the ability to integrate a new business into an existing company’s operations may deliver long-lasting benefits. If an organization develops processes and protocols for M&A, it may be able to identify and address problems throughout a merger or acquisition quickly and effectively.
Cathy Hauslein joined Mattress Firm Holding Corp. in April 2014 as senior vice president and Chief Accounting Officer. Her responsibilities in this role include overseeing regulatory compliance and accounting standards and practices, leading the reporting, accounting and tax teams, and acting as a business partner to the CFO on all technical reporting and operational accounting issues as Mattress Firm continues to grow. Hauslein, a Certified Public Accountant, came to Mattress Firm with more than 25 years of financial experience working with public companies.
Prior to Mattress Firm, she served seven years as Vice President and Corporate Controller for Susser Holdings Corp., which was purchased by Energy Transfer Partners in August 2014. Under the brand name Stripes, Susser operated retail convenience stores and wholesale motor fuel distribution company, Susser Petroleum Partners LP, now Sunoco LP. At Susser, Hauslein managed a staff of over 150 employees. Ms. Hauslein was a key player in the strategy, formation and IPO of Susser Petroleum Partners LP as the initial MLP in the retail convenience store space.
From 2001 to 2007, Hauslein served as the Vice President and Controller for BancTec Inc., which provided hardware, software and business process outsourcing. Ms. Hauslein, a Certified Public Accountant, started her career with KPMG, LLP, after graduating summa cum laude from Baylor University, where she earned a BBA in accounting.