Problem
A large company acquiring a much smaller one needed day-to-day management of the acquisition process, with emphasis on due diligence. Senior management lacked time to oversee the process, but also feared due diligence errors of omission.
Management also realized that an uncoordinated due diligence effort could overwhelm the small target, reducing its value.
Finally, coordination between acquirers' departments was critical.
| Solution
Effective Agreements was engaged to manage the day-today process. We supervised visits to target by twenty-four representatives of acquirer, coordinating meetings with the target management to prevent their complete immobilization. Effective Agreements also managed process timing with the target's investment bankers. These efforts assured that hundreds of agreements and purchase orders were reviewed on a timely basis.
| Result
Due diligence was substantially completed in three weeks. The team found unbelievable liabilities in the target's existing agreements. Questions about clear ownership of target's intellectual property also arose. Acquirer avoided potentially unlimited liabilities, and walked the deal.
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| Early Revenue Stage Company Example |
Problem
Having to manage a new funding round caused the V. P., Finance to become the "choke point" for needed agreements. Turn-around times for documents increased to months in some cases. Potential revenue delays resulted, as deployment deadlines approached. Sales personnel lacked office space, reducing their effectiveness, as leases were not negotiated.
| Solution
Effective Agreements was engaged on an hourly basis, and handled over forty agreements during the initial ninety day period. Sales persons dealt directly with Effective Agreements, reducing turnaround time to days and sometimes hours. The CEO and CFO were not bothered with requested changes to their base agreements, other than those significant enough to require a decision to be made at their level.
| Result
The agreement backlog was completely cleared in less than ninety days. A major improvement in sales persons' efficiency resulted as agreement turnaround times were reduced. Effective Agreements and the client agreed that the company saved as much as $15,000 when compared with other possible solutions.
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| Strategic Alliance Example |
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Problem
A telecommunications company wished to enter into a strong, complex strategic alliance with a German equipment producer:
Each company was to sell the other company’s products in its home country.
Joint development could result in new intellectual property, the ownership of
which needed to be codified in advance.
Personnel were exchanged, resulting in a
total of ten expatriates whose needs
required coordination through a single representative of each company.
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Solution
Negotiating teams from both companies met and worked out the details in an informal setting, creating flip charts from scratch.
Using the resulting flip charts, Effective Agreements authored the Memorandum of Understanding that was executed by the
CEO’s of DSC and the Dutch parent
company.
Effective Agreement's President served as
the single-point-of contact for the expatriates.
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Results
Effective Agreements received kudos from both the parent Dutch company and the German subsidiary for drafting a document that was workable, fair and that accurately captured the terms as agreed.
The cooperation ran smoothly for three years, with excellent relationships between the management teams, the marketing/technical teams, and the expatriates and their hosts.
Expatriate problems that did surface were handled efficiently and quickly.
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