How Far Have We Come? Michael J. Fox 2015 Technology Predictions
Corporate America September 2015 • WWW.CORPORATEAMERICA-NEWS.COM
PLUS: Emerging Trends in Securities Litigation
Baskin Richards PLC is a one stop for litigation needs, no matter who you are.
M&A Integration
What happens after the deal closed? How does this determine the true value?
Anticipation Acquisition Surprises Acquisitions are easily among the most far-reaching, ambitious business decisions that senior executives face. Are you up to the challenge?
Sustainable Finance
The ins and outs, ups and downs faced by American corporations as the technological age continues to evolve.
Association Law Group, P.L. (“ALG”) is a full service law firm dedicated to the representation of homeowner and condominium associations throughout Florida, as well as other not-for-profit corporations. ALG’s legal services include representing clients as general counsel and on collections, evictions, foreclosures, contract negotiations and other general real estate legal matters. ALG also provides legal services relating to interpreting association governing documents and Florida law, amending governing documents, supervising and/or conducting annual elections and other association meetings, real estate transactions, general corporate matters, commercial litigation, the transition of association control from developers to unit owners, and 558 construction defect claims. ALG also handles the enforcement of violations including addressing illegal tenant situations and other non-compliance issues relating to an association’s governing documents. ALG serves as legal counsel to hundreds of association clients in sixteen counties throughout Florida. ALG has experience in representing all types of associations ranging from high rise condominium towers, to large master communities with thousands of homes, to smaller townhome and low-rise condominium projects. ALG’s team of over fifty attorneys and staff members prides itself on providing quality legal services to clients at a reasonable price. All of ALG’s attorneys and staff are well-trained and continuously strive to remain at the forefront of the legal profession. Each association account is managed by multiple partners, associate attorneys, law clerks, and legal assistants. Additionally, ALG provides its association managers and board members with “real time” access to status reports relating to each collection file so that they are kept fully informed. ALG also has other online services available through its website (www.AssociationLawGroup.com) for managers, board members and owners including password-protected access to account information, automated estoppel requests, and credit card capabilities. ALG has been nationally and locally recognized by dozens of media sources for its innovative legal strategies on behalf of condominiums and homeowners associations.
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Contents 12 Feature
Home to the Future
One month from now (Oct 21st) will herald Marty McFly’s arrival in Hill Valley Ca in the year 2015. What predictions have and haven’t landed?
14 28
Feature
Is Your Organization at Risk
Rapid Changes in Innovation Technology are Bringing Disruption to Every Area of Organisations.
Feature
M&A Integratioin: Looking Beyond the Here and Now
What happens AFTER the deal closes determines its true value. A talk with Conduit Consulting’s founder reveals insights.
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4
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News
Bank of America Expands From CashPro© Invest abroad, to leadership
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structuring at home, Bank of America is determined to move forward
With a Wink
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Feature
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Xerox
Solar Power is the way Forward
Equal Earth is a leading independent power company providing homes and businesses with renewable solar electricity ...
Technology in Corporate America: the Good, the Bad and the Ugly
With technological advancements running rampant, how can American financial institutions maintain security and still be ‘cutting-edge’?
30 Emerging Trends
On the Cover 20
Feature: Sustainability: Environment & Economy What does climate change mean to the corporations of America: a look at the perils and opportunities which abound.
September 2015 • CorporateAmerica • 3
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Mercer Enters Strategic alliance with Transamerica
Calgon Carbon World Headquarters & Innovation Center Grand Opening
Mercer has entered into a strategic alliance with Transamerica whereby Transamerica will acquire Mercer’s US defined contribution (DC) administration book of business.
Calgon Carbon Corporation (NYSE: CCC), an environmental technology company headquartered in Pittsburgh, held a ribbon cutting ceremony to celebrate the grand opening of its new world headquarters in late September.
Transamerica will also become Mercer’s preferred DC record keeping provider. The transaction is expected to close by the end of 2015. “We are excited about this alliance with Transamerica as both firms share a deep passion for service excellence and value delivery,” said Ken Haderer, Mercer’s Chief Operating Officer. “After the transaction is complete later this year, we will partner with Transamerica for our defined contribution recordkeeping administration business. We also want to clearly state that we are committed to continuing to provide best of class service to our defined benefit and health clients through our own solutions.” “We are looking forward to continuing Mercer’s tradition of delivering excellent customer service to the defined contribution clients who will transition to Transamerica and expand our large market presence as part of this transaction,” said Kent G. Callahan, President and Chief Executive Officer of the Investments & Retirement division of Transamerica. “At the same time, they’ll gain the advantage of our enhanced retirement planning and reporting capabilities, mobile account management and retirement counselling services. We are thrilled to bring these two great teams and our collective capabilities and talents together to further benefit our clients.” Mercer’s US DC retirement administration business has more than US$71 billion in plan assets, 148 clients and more than 917,000 participants. A global consulting leader in talent, health, retirement and investments, Mercer helps clients around the world advance the performance of their most vital asset – their people. More than 20,000 employees are based in 43 countries and the firm operates in over 140 countries, it is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With 57,000 employees worldwide, annual revenue exceeding $13 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. 4 • CorporateAmerica • September 2015
Randy Dearth, Calgon Carbon’s Chairman, President & CEO, alongside the company’s board of trustees, welcomed local municipal and state officials including Rich Fitzgerald, Allegheny County Executive, Mark Mustio, Pennsylvania State Representative, Mike Doyle, Congressman, Keith Rothfus, Congressman, Tim Murphy, Congressman and Matt Smith, Greater Pittsburgh Chamber of Commerce, to the new facility located in Moon Township. Calgon Carbon has a 15-year lease with DiCicco Development to occupy 75,566 sq. ft of the 130,000 sq. ft. building. Approximately 200 of the company’s executive staff, sales, and service employees made the move in early February. The research and development laboratory, which is known as the Innovation Center, was completed in August of this year. “This headquarters represents a new chapter for Calgon Carbon,” said Randy Dearth, Chairman, President and CEO, Calgon Carbon. “We’ve transformed this company over the past two years and this new location allows us to continue to grow and expand both our research and our business.” Consistent with Calgon Carbon’s commitment to sustainability, the building, expected to be certified LEED Gold, features the use of solar power, a high-efficiency zone heating and cooling system, a living vegetation roof, and ergonomic workstations. “I’m proud to be a part of today’s ribbon cutting ceremony,” said Allegheny County Executive, Rich Fitzgerald. “Calgon Carbon has been a long-standing company in our area and to witness its growth is truly remarkable.” Calgon Carbon Corporation, is a global leader in innovative solutions, high quality products and reliable services designed to protect human health and the environment from harmful contaminants in water, and air. As a leading manufacturer of activated carbon, with broad capabilities in ultraviolet light disinfection, the Company provides purification solutions for drinking water, wastewater, pollution abatement, and a variety of industrial and commercial manufacturing processes.
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Auction.com and Five Star Institute Support Operation Homefront In early September, the Five Star Institute facilitated the presentation of mortgage free homes to military veterans through Operation Homefront. The presentation of these homes was part of the Military Heroes Keys for Life Event, which took place during the 12th annual Five Star Conference & Expo—the largest event in mortgage servicing. “This home presentation to veterans program is part of our ongoing mission to raise awareness of the needs of our veterans to obtain housing,” said Five Star Institute President and CEO Ed Delgado. “The mortgage industry came out in full support of this mission as gauged by the attendance at the Military Heroes Keys for Live Event, and the ongoing contribution of many of our Five Star supporters.” Operation Homefront leads more than 2,500 volunteers with nationwide presence, who provide emergency and other financial assistance to the families of service members and wounded warriors. In support of this initiative, Auction. com, host sponsor of Military Heroes Keys for Life, presented a donation check in the amount
of $50,000 to Operation Homefront. This brings Auction.com’s donation to $100,000, following a donation at the Five Star Government Forum in March. “We welcomed the opportunity to sponsor this home donation program for the members of our military along with the Five Star Institute and in conjunction with Operation Homefront,” said Auction.com CEO Tim Morse. “Events like the Five Star Conference and the Military Heroes Keys for Life are crucial not only to our industry, but in facilitating the American dream of homeownership. There is no one more deserving of help than our military heroes and their families.” The Five Star Institute, based in Dallas, Texas, is a publishing, communications, and event production company focused on serving the mortgage banking industry. Each year, Five Star hosts the largest housing industry event in the United States—the annual Five Star Conference and Expo. Among its many publications are DS News , the only professional journal in the country dedicated solely to default servicing, and
MReport, a B2B trade publication serving the broader mortgage field. Auction.com, founded in 2007 and headquartered in Irvine, California, is the nation’s leading online real estate marketplace, having sold more than $32 billion in residential and commercial assets. Attracting buyers from more than 100 countries worldwide, the company serves a wide variety of real estate customers – from major financial institutions and institutional investors to individual consumers and real estate professionals. Operation Homefront, headquartered in Lawton, Oklahoma is a national non-profit, Operation leading more than 2,500 volunteers with nationwide presence who provide emergency and other financial assistance to the families of service members and wounded warriors. It has provided assistance to thousands of military families since its inception in 2002. Nationally recognized for superior performance by leading independent charity watchdog groups, 93 % of total donations to Operation Homefront go directly to programs which provides support to our military families.
Baja Fresh Opens Its Newest Restaurant in Kennewick, Washington Baja Fresh, the fast-casual Fresh Mexican chain, announced towards the end of August the opening of its newest Baja Fresh location in Kennewick, the largest of the Tri-Cities, in beautiful south eastern Washington State, conveniently located at 4898 W. Hildebrand Blvd, just off Highway 395. This new 3,000 square foot Baja Fresh restaurant, designed by San Francisco based Tesser, Big Picture Branding, encompasses Baja Fresh’s latest interior restaurant design, service and customizable menu. Additionally, at the new Baja Fresh, guests will soon have the option to enjoy Baja Fresh’s own Margarita On The Rocks or a premium imported Mexican beer with lunch or dinner. Guests will also notice a distinctly new interior incorporating the use of natural recycled woods, stone and warm colors in this updated design, in addition to a more accommodating family friendly seating plan.
The new Baja Fresh restaurant in Kennewick is owned by Phil and Lisa Haberthur who currently operate six Baja Fresh restaurants in Oregon, Washington and Idaho. Phil and Lisa were recognized as best in class Baja Fresh franchisees for 2014. “We’re extremely excited to be opening our newest Baja Fresh in the Tri-Cities. We believe our combination of fresh, healthy ingredients, inviting atmosphere, and top-notch customer service will be well received,” said Phil Haberthur. “We look forward to joining this community and bringing Baja Fresh to the region.”
Founded in 1990 and headquartered in Irvine, Calif., Baja Fresh franchises 165 restaurants in 26 states as well as restaurants in Dubai and Singapore and serving handmade, fresh Mexican flavors for lunch, dinner, dine-in or take-out, in a spacious and contemporary environment, all Baja Fresh entrées are made with fresh, all natural, hormone free, chicken, fire grilled steak, line caught seafood, slow roasted pork carnitas; plus handmade guacamole and salsa bar hosting six salsas made fresh all day, every day. Contacts
“We are very pleased to have Phil and Lisa Haberthur and their team opening our newest Baja Fresh location in Kennewick, Washington,” says Chuck Rink, President and CEO of Baja Fresh. “We are excited to have guests in Kennewick visit the newest Baja Fresh experience.”
September 2015 • CorporateAmerica • 5
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UK-based Henley signs $100 million deal for Apartments across East Coast UK-based private equity real estate firm, Henley, has joined forces with WaterWalk Hotel Apartments, Jack DeBoer’s fifth national brand, to construct and open five WaterWalk franchises across Florida, North Carolina, and New York. As part of the $100 million agreement, Henley has selected individual sites in Albany, Charlotte, Fort Lauderdale, and North Orlando, with construction starts slated for January 2016. WaterWalk Hotel Apartments was envisioned by entrepreneur Jack DeBoer, the founder of Residence Inn, Summerfield Suites, Candlewood Suites, and Value Place, and opened the doors to its first site in 2014, achieving full occupancy within just seven months. The deal with Henley marks the first investment in the WaterWalk franchise by a non-U.S. based investor. It also represents Henley’s first transatlantic agreement, following the company’s recent light industrial acquisitions in the Netherlands and Germany, which were Henley’s company’s first international deals since venturing into the continental European market in March 2014. The firm currently holds around £600 million in assets under management. “WaterWalk’s versatility as a hybrid property type gives investors and franchisees an unmatched opportunity in the real estate industry by providing the strong revenue potential associated with upscale extended-stay hotels and the capital structure and valuation of an apartment,” said David Redfern, President of WaterWalk’s Real Estate Development and Franchising Groups. “In fact, according to CoStar, one of the biggest trends for 2015 hospitality management is foreign investment in hotel portfolios, particularly extended-stay and select-service properties. Henley realized this was a strong franchise partnership due to the demand for this unique product. They believe in our strategic vision, and they are eager to help make our brand available to consumers across the country.” Ian Rickwood, Chief Executive Officer at Henley, said: “The deal with WaterWalk represents another major milestone for Henley as we further our international presence and enter the U.S. market. Our investment strategy is founded upon ensuring the best possible returns for our investors and our analysis of current demand trends in 6 • CorporateAmerica • September 2015
the leisure and residential markets in the States made WaterWalk a highly attractive investment opportunity. We are looking forward to breaking ground on these new properties and the complexes opening next year. Our intention is that we will add more units to these first five and engage in additional investment and development activity in the U.S.” WaterWalk’s hybrid model of hotel and apartment combines all of the traditional hotel services into a gated, purpose-built community, and offers a bevy of upscale amenities and features such as all-inclusive pricing, full-sized appliances in a modern kitchen, high-speed Internet, DirecTV with premium channels, housekeeping, fitness memberships, a communal bicycle program, local transportation, and free, customized breakfast. Companies using WaterWalk for their corporate housing will find an added level of convenience and quality over other corporate housing facilities, including a national sales team and full support staff that are accessible and available onsite 24-hours a day for any guest needs, increased flexibility in lengths of stay, competitive pricing, and premier safety and security measures. WaterWalk’s Wichita location has already drawn corporate lodging rentals from Fortune 1000 companies. In addition to Henley’s five sites, construction will also begin in 2015 on new WaterWalk Hotel Apartments complexes in Louisville, Denver, Raleigh, Tulsa, and San Antonio.
Headquartered in Wichita, WaterWalk Hotel Apartments is the fifth national brand started by Jack DeBoer, founder of Residence Inn, Summerfield Suites, Candlewood Suites, and Value Place. The Apartments combine the most appealing features of an upscale extended-stay hotel with the lifestyle of apartment living. Guests may choose to stay a day, a week, a month, a year, or longer with an all-inclusive bill for utilities, TV, internet, phone, plus concierge services. For the full-service Gold package, housekeeping, fully-furnished apartments, and breakfast are all provided. Established in 2006, Henley is a leading UK private equity real estate investor focusing on development, investment and asset management in the commercial, residential, healthcare and debt real estate market. Since its inception Henley has doubled in size every year and is expected to do the same again in 2015. The company currently has around £600 million assets under management (as of June 2015). Henley’s platform is focused on six core strategies, prime London residential development, opportunistic commercial investment, HHI a healthcare fund, HPF (Henley Property Finance) a debt focused business, Henley 360 a European light industrial vehicle, Private Equity into RE third party led businesses. In addition, Henley is acting for a number of international family offices through its HFO (Henley Family Office) business, launched in February 2014.
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8. Rimini Street Expands Las Vegas Worldwide Headquarters and Workforce Rimini Street, Inc., the leading independent provider of enterprise software support for SAP AG’s (NYSE: SAP) Business Suite and BusinessObjects software and Oracle Corporation’s (NYSE: ORCL) Siebel, PeopleSoft, JD Edwards,E-Business Suite, Oracle Database, Oracle Middleware, Hyperion and Oracle Retail software, announced in early August the opening of its next phase (Phase II) expansion of the Company’s worldwide headquarters in Las Vegas, and the posting of 60 new jobs to staff this expansion located in the Hughes Center. The new staff positions include roles in finance, IT, legal, marketing, facilities, administration and software engineering, and will support Rimini Street’s rapid global growth. Founded in Las Vegas in 2005, Rimini Street now has more than 600 employees and has signed more than 1,000 clients – including over 100 Fortune 500 and Global Fortune 100 organizations. The Company has achieved more than US$100 million in annual revenue with 38 fiscal quarters of consecutive growth. Rimini Street
serves clients in more than 90 countries, with global operations in Brazil, UK, Germany, India, Israel, Australia, Japan and China. Rimini Street will commemorate the expansion with a gala ribbon-cutting ceremony and cocktail party tonight. Scheduled guests include government representatives, community leaders, Las Vegas Metro Chamber of Commerce President & CEO Kristin McMillan, and Las Vegas Rotary President, Mary Ann Avnet. “Las Vegas is gaining recognition as a center of global technology thanks to market-disrupting, innovative and fast-growing technology companies like Rimini Street that continue to expand their investments in Nevada,” said McMillan. “We look forward to celebrating Rimini Street’s success and expansion in Las Vegas and across the globe.” “Rimini Street was founded in Las Vegas 10 years ago because of the city’s business friendly climate, capable workforce, and the logistical and technical advantages of McCarran Airport and
Switch SUPERNAP data centers that companies can leverage,” said Seth Ravin, Rimini Street CEO. “Rimini Street sees Las Vegas as a significant competitive advantage for a worldwide headquarters location, and we plan to add hundreds of new jobs to support the local community. In addition, the Rimini Street Foundation is actively supporting and working with many community organizations to assure that Rimini Street is giving back to the community that has provided us so much support over the years.” Rimini Street is the global leader in providing independent enterprise software support services. The company has redefined enterprise support services since 2005 with an innovative, award-winning program that enables Oracle and SAP licensees to save up to 90 percent on total support costs. Clients can remain on their current software release without any required upgrades for at least 15 years. Over 1000 global, Fortune 500, midmarket, and public sector organizations from a broad range of industries have selected Rimini Street as their trusted, independent support provider.
The MReport & Five Star Partner to Honor the Women of Housing & Mortgage The MReport, a B2B trade publication focused on the mortgage banking industry, announced it’s 2015 ‘Power Players’ and ‘Leading Ladies’ honorees as part of it’s August 2015 Special Issue ‘Women in Housing.’ In addition to revealing the names of more than 40 women in the industry who are profiled in the issue, the MReport also announced it was partnering with the Five Star Conference and Expo to honor these women at the Women in Homeownership Leadership Forum. MReport’s 2015 “Power Players” are mortgage and housing veterans with roles in both the government and private sector. In addition to powerful female leaders, 40 additional women were selected for MReport ’s 2015 “Leading Ladies” list. The women selected for this honor were nominated by their peers in the industry, who cited all the qualities that make them strong leaders - such as their intelligence, drive, and pursuit of innovation.
Honorees include Christina Boyle, SVP and Head of Single-Family Sales and Relationship Management, Freddie Mac; Mary Frances Burleson, President and CEO of Ebby Halliday Real Estate, Inc.; Kathryn Madison, CEO, HSBC Finance Corp.; Laurie Maggiano, Program Manager for Servicing and Secondary Markets, Consumer Financial Protection Bureau; Kathleen Malone, SVP of Business Architecture for Customer Excellence, Wells Fargo Home Lending; and Congresswoman Maxine Waters (D-California). The Women in Homeownership Leadership Forum will take place on Friday, September 18, 2015 from 1:15 p.m. to 2:15 p.m. as part of the Five Star Conference. The keynote speaker is the Honorable Sheila Bair (FDIC Chairperson 20062011). Bair was the 19th Chairperson of the U.S. Federal Deposit Insurance Corporation (FDIC) from 2006-2011 and has an extensive background in banking and finance in a career that has taken her from Capitol Hill, to academia, to the highest
levels of government. Additional speakers include “Power Players” Mary Frances Burleson, Kathryn Madison, and Kathleen Malone. “The female leaders working in the housing and mortgage industry are indispensible,” said Five Star President and CEO Ed Delgado. “Through the recognition of the MReport and the Women in Housing Leadership Forum, a spotlight will be put on the innovators shaping our industry.” MReport’s 2015 “Power Players” and “Leading Ladies” list were complied through nominations received from the industry. The Five Star Institute is a publishing, communications, marketing, and event planning company. The Institute hosts the largest mortgage event in the United States—the Five Star Conference and Expo. Among its many publications are DS News, dedicated solely to default servicing, and MReport,a B2B trade publication serving the broader mortgage field. September 2015 • CorporateAmerica • 7
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Technology in Corporate America With technological advancements running rampant, how can American financial institutions maintain security and still be ‘cutting-edge’? Where are the ‘safe investments’ and how can technology run amok leave you vulnerable?
For the latter we can look at the situation in which Citizen Bank found itself in August. Even with the advanced technology at our disposal, there are still chances for error when depositing checks at the bank. Bank’s scanner may malfunction causing slips to be misread; totals slips may not match the true deposit. Many feel that when these rare occurrences take place the bank will notify you and correct the difference. Citizens however did not. The Consumer Financial Protection Bureau and other federal bank regulators ordered Citizens, operating in 11 states, to refund at least $14 million to customers and pay $20.5 million in penalties for unfair and deceptive banking. After being tipped off by a whistle-blower, regulators found that from 2008 until September 2012, Citizens did not investigate and correct deposit discrepancies under $50 which were flagged by its review system. The cut-off was changed in November 2013 to $25. In that time, the bank’s account disclosures reported to customers that all deposits were subject to verification. The action against Citizens is the first by the consumer bureau for deception in handling deposits. Regulators would not say whether other banks were being investigated for similar violations or whether Citizens could be criminally liable. Regulators do not have authority in criminal cases; however, they did note that by not correcting the discrepancies, Citizens would have cheated itself when a mistake was in the customer’s favour. Regulators conceded that Citizens, with assets over $100 billion, may have viewed the small discrepancies as not worth the time to review and fix. But a rounding error to a bank is real money to a customer. No amount of money should be trivial for banks In light of recent financial events, around the globe, banks need to work at re-earning the public’s trust. This is an error in the mishandling of technology by a corporation; one which cost the bank more than just monetary assets. 8 • CorporateAmerica • September 2015
Of course there are other ways in which technology can be a foible to the corporations of America, ramifications of the IRS hack earlier in the year are still being felt. In August, the I.R.S. announced that a hack to its website in May was more problematic than originally thought. Accessing taxpayer information through the “get transcript” application, Hackers allowed users to recall information input in previous tax returns. Following the cyberattack, the system was shut down. It was originally thought that there had been 114,000 successful breaches and 111,000 unsuccessful attempts. However a later review has identified an additional 220,000 successful and 170,000 unsuccessful incidents. This brings the total count to a total of 615,000 attempts, about three times more than the IRS formerly thought. The agency predicts that the breached information will be used in 2016 to file fraudulent tax returns. 15,000 fraudulent returns were filed this year as a result of the hack, likely amounting to under $50 million worth of refunds. The agency is attempting to review whether the number of fraudulent returns increased due to the hack. The IRS is mailing letters to taxpayers whose information had been breached to offer free credit monitoring including a new personal ID number ensuring next season’s tax returns will be unaffected. However technology is not just a foil for corporations, the eye-wearable device Google Glass is set to help workers at the world’s leading postal and logistics company pick products and pack them for shipping in a jiffy. Exel, part of the supply-chain division of Deutsche Post DHL Group, is replacing handheld scanners with Google Glass, fitted with a warehouse management software in two US warehouses later this year, Wall Street Journal reported.
“The technology like Google Glass could prove especially useful during peak periods when Exel hires thousands of temporary workers,” Adrian Kumar, vice-president for solutions design with Exel, was quoted as saying. “These are people off the street who are not familiar with our warehouses, do not know where anything is, and we see huge potential for that type of situation, especially with training,” Kumar said. Google Glass will tell warehouse workers the fastest route to find products and can read bar codes. It will reduce the time needed to pick out an item and pack it for shipping. “The technology has the most application in e-commerce warehouses where workers might need to find a handful of items out of more than a million individual products,” DHL Group said. Google is finding other ways to promote its existing products as it has been announced that Google Earth can be a helpful resource in lawsuits has come as a huge relief to many people who seek justice in the courts of law. When the US federal appeals court made a ruling to the effect that Satellite images obtained from Google Earth now qualify as evidence there was great relief from many. What this means is that you can now present photographs from the app to the courts, which will accept them as proof that the accused committed the crime. The reason for accepting the images from Google Earth as evidence is that they are impossible to tittle-tattle and that they do not make any assertion. When your lawyer wants to prove that you did not commit any crime, the courts will not reject the images from this app. If your lawyer wants to prove that somebody different committed the crimes, he is free to present the images from this app to support his claims and the courts will accept these as evidence.
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As the program has GPS coordinates makes it exempt from human manipulation and intervention, thus acceptable in courts to prove innocence or lack thereof in a criminal case. The presence of the GPS coordinates eliminates the app from being subject to hearsay. On the other hand, this news does not lack challenges. People challenging the news regarding the use of such an app cite the fact that it is nothing more than a machine that can prove unreliable. The fact that information on Google Maps is susceptible to malfunction was also a concern to the judges that decided to allow images from the program as evidence in lawsuits. However, the judges stated that all concerns regarding malfunctioning, manipulation and evidence tampering associated with the program are easy to handle by adhering to the rules of authentication. With such rules, the following has to happen: • showing proof that the machine on which the Google Maps images were captured is not only properly calibrated, but also reliable • showing proof that the GPS coordinates, which are in the data, are accurate The evidence that Google Maps brings to the court could help you win a case regarding the exact location where you were at when you were alleged to have committed a particular crime. The program could shed some light on your exact location during the time of your arrest. The Google Maps app can help destroy any fabrication that the arresting officers might present against you. The program helps to pinpoint the locations where you were, when a crime was taking place. businesses and brands, as well as for the talented people who are operating them. We look forward to a successful transition and we will work together to maximize value for the shareholders of both companies” he added.
September 2015 • CorporateAmerica • 9
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With a Wink Emerson Presents its Wi-Fi Thermostat Rage Wink compatibility expands convenient control of the Sensi thermostat to also include other connected home products from a single mobile app Emerson, a leader in the thermostat and HVAC controls industry, announced that its new Wi-Fi thermostat is now compatible with ‘Wink’ home automation systems. The Sensi™ Wi-Fi Programmable Thermostat comes with an intuitive app and has achieved tremendous growth since its launch last year; it is now one of the best-reviewed Wi-Fi thermostats on the market with many retail outlets and professional HVAC contractors carrying the Sensi thermostat. “We are thrilled about the Sensi thermostat’s popularity, as we see it as just the beginning of a larger connected-home platform for Emerson” “Homeowners are loving the Sensi thermostat for its affordability, ease of use, reliable control and outstanding mobile app – and now for its Wink compatibility as well,” said Bob Sharp, executive vice president at Emerson and business leader of Emerson Climate Technologies. “Emerson’s industry-leading position in HVAC components and controls has enabled us to develop a superior smart thermostat.” Giving homeowners remote access to its settings from smartphones, tablets or PCs, while the thermostat’s Wink compatibility enables universal connectivity with other home smart products such as lights, locks and garage doors, the Sensi Wi-Fi Thermostat can save up to 33 percent in energy costs by adjusting their thermostat schedules. “Smart thermostats are one of the most tangible use cases for consumers starting out on their smart home,” said Brett Worthington, general manager at Wink. “Integration with Emerson brings a leader in HVAC onto the Wink platform and furthers our mission to make the smart home accessible to everybody.” The Sensi thermostat is Emerson’s first entry into 10 • CorporateAmerica • September 2015
the Wi-Fi thermostat market, a category which is expected to grow to $600 million globally by 2018, according to ABI Research. The research group earlier this year also included Wink in its list of 118 up-and-coming tech innovators set to disrupt tech markets. “We are thrilled about the Sensi thermostat’s popularity, as we see it as just the beginning of a larger connected-home platform for Emerson,” said Sharp. The Sensi thermostat is the first Wi-Fi thermostat to achieve Energy Aware certification. The Sensi user-friendly app quickly walks users through installation and Wi-Fi connectivity. The Sensi thermostat features two standard replaceable AA batteries and can operate with existing thermostat wiring without the need for continuous 24V power, which is not available in nearly 50 percent of homes, in most cases. The Sensi thermostat is also one of the more affordable smart thermostats. Emerson is based in St. Louis, Missouri and brings technology and engineering together to provide innovative solutions for customers in industrial, commercial, and consumer markets around the world.
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September 2015 • CorporateAmerica • 11
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Home to the Future
by Stephen Jury A month from now on 21st October Marty McFly will land in Hill Valley, a small town in California, after travelling from the past via Doc Brown’s seriously modified DeLorean. Having previously travelled back to 1955, Marty MCFly may have been in awe at the house of the future presented in 2015, but it would seem that the writers of ‘Back to the Future 2 ’weren’t too far from reality, at least on some parts. What may surprise him however, or at the very least something absent from the plot of the film, is the amount which houses of the future cost, even before being updated with all the technology and gadgets of today.
nately, a free roaming hover board is is yet to come to fruition, despite attempts by the likes of Lexus. The closest we have is the Hovertrax, a two wheel vehicle that allows the user to stand on the base of the two wheels and operate it via a wireless handheld trigger.
In 1955 the average house price was just £1,928, climbing 1,783% to £34,378 in 1985. However when Marty landed in the future, he wouldn’t have expected the average house to cost £190,807, an increase of another 555% from 1985 to 2015. If he was to do the same today and flash forward another 30 years, where eMoov rule the world of estate agency with the same price increase of 555%, this would result in an average house price of over £1m. Had he realised this, surely he would have added a few properties to his portfolio in 1955.
On entering the house of the future, Marty is amazed to see that the traditional method of lock and key has now become obsolete. Instead, one gained access through a thumb print scanner, making the property burglar proof.
It is unlikely that anyone, even the writers of this film, in 1985 would have predicted such an increase; however they did correctly predict some of the gadgets available today with astounding accuracy. Consumer technology has come a long way since the 80’s with everything revolving around one item in particular, the cell phone and wearable tech. Surveying 1,000 UK homeowners, eMoov has found that one fifth of these placed the greatest importance on the strength of the phone network when buying a house. A further 25% placed the availability of super-fast broadband as the most important factor, highlighting the importance technology now has in the purchase of a home. Smart phones are capable of performing a vast amount of tasks around the house, from turning on your heating and electricity from a remote location, doubling up as a TV remote, ordering shopping online to be delivered to your door, even searching for a new home. But what else did the Back to the Future franchise boffins predict 30 years ago? Perhaps the most iconic of the futuristic gadgets in Back to the Future was the hover board. Unfortu12 • CorporateAmerica • September 2015
A smaller, lighter evolution of the Segway, it is small enough to pack into a backpack when not in use.
This might seem like something from 3015, let alone 2015, but now a fingerprint lock for your home is available from as little as £80! The house of the future also features ultra-modern, touch screen pads which are taken anywhere and used for a variety of things. Flash forward to 2015 and not only is this tech in existence, but the tablet pc is a house hold item, used with ease by children let alone adults. In the 80s, Atari was ground breaking entertainment system and many children spent hours battling against Space Invaders, games now available on your phones & tablets for free with games consoles evolving at a staggering rate. The next gen consoles bring immersive, lifelike gaming experiences to our front rooms, controllers are wireless and, alternative content, films, TV shows and more can be downloaded via wireless internet, straight to the console. The TV has evolved alongside these consoles. If Marty was impressed by a slim wall mounted TV in the future, he wouldn’t believe his eyes if he saw Samsung’s latest 110 inch TV. We are on the cusp of virtual reality becoming a household product. Although the technology is alive and kicking today, it isn’t accessible to the masses just yet. The TV has evolved alongside these consoles. If Marty was impressed by a slim wall mounted TV in the future, he wouldn’t believe his eyes if he saw Samsung’s latest 110 inch TV.
TVs now are also smart; you don’t need a next gen console to make the most of them. In Back to the Future, Marty engages in a real time conference call via the TV. In the 80s, this seemed like science fiction, but now apps like Skype and Facetime mean you can call anyone, anywhere in the world, for free, via your television, computer or cell phone. While on the call Mary is amazed by an instant payment system, allowing him to send money through thin air without having to actually hand over the cash. Online banking has been around for a while now and Paypal also allows us to transfer funds via the internet, in safety, at the touch of the button. This has now gone one step further and I Pay and Google Pay now allow us to pay instantly without even using our bank cards. Another development linking back to entertain that is 3D entertainment. Not only is this available in cinemas, but you can purchase 3D TVs for your own front room. They may not have quite reached the level of sophistication Marty enjoys watching Jaws 3D in the film, but it is still pretty impressive. In Back to the Future II they stated that the fax would be the most efficient way of communicating in this day and age. How wrong they were. The fax is now a dinosaur and although there may be a few still operating in captivity, they have long been replaced by email and scanners. This said the principle of firing someone via technology such as fax, as shown in the movie, is very much a reality today. There have been countless cases whereby a business has cut loose its employees by email, text and even Twitter. Property expert, founder and CEO of eMoov.co.uk, Russell Quirk, commented: “It’s always funny looking back at old films and how they portray the present day. Although the portrayal of 2015 in the Back to the Future franchise is somewhat accurate, albeit a little more exaggerated, I don’t think even they would have predicted a house price increase of 555%. Who knows what the house of 2045 will look like but if prices continue the way they are, we could be looking at an average house price of over £1m.”
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Innovation Disruptions Is your Organisation
at Risk
Rapid Changes in Innovation Technology are Bringing Disruption to Every Area of Organisations. ‘Will That Make Tomorrow’s HR Managers Technology’s Masters - or its Servants?’ asks Richard McCann. The last five years have seen step-changes in technology, and the uses thereof, which has had a profound impact on personal and commercial environments - indeed the overlap between them has become blurred with the massive adoption of mobile technology and the emergence of the Internet of Things. IT provision has also experienced similar change, including the growth of out-sourcing, and the emergence of new technology providers. There have been losers too – including internal IT departments and many of the established IT giants. Cost reductions, effectiveness, efficiency and differentiation are all there for the taking. Sectors such have marketing have been quick to spot the opportunities. But whether sectors such as marketing and HR have grasped these opportunities - or even recognised the significance of them - has yet to be seen. Top psychologist Professor Sir Cary Cooper believes that the recession has made people insecure and less inclined to innovate: “There are fewer people doing more work. They’re feeling job insecure because of what’s happened around them during the recession. They’re working longer hours to show ‘face time – or what I call ‘presenteeism’ so they come early, stay late, they send emails at night, they work while they’re on holiday. “All that is affecting the culture of innovation negatively. Innovation comes from the interface of all sorts of people and how well you team-build. And insecure overworked people don’t do that well. “But if you create the right kind of culture you will get innovation and creativity. So you’ve got to do something differently.” The Legendary rock band Marillion’s Racket Records business is just one of HR software firm Alchemy SA’s high-profile clients, where MD Richard Converly and his team use Cloud-based technology to streamline HR. “For example, loads of HR people still have a series of spreadsheets and paper forms to track equipment held by staff, annual leave, 14 • CorporateAmerica • September 2015
appraisals and training. That’s very risky - - they can easily be lost, are difficult to keep up to date and not to mention the fact that due to their confidential nature it is very difficult for management to see these records. “New systems are assisting HR staff in their roles, saving time and duplication of information in the accounts department in the process. Innovative technology is about delivery above method. It requires thinking about propositions from the HR’s point of view, rather than delivering new technology because it’s there!“ ACCA Council Member Steve Bailey is also a director of Identity Methods, a firm that helps managers work with technology in a variety of sectors from banks and local authorities to emergency services. He argues that HR has seen its position diminished in many organisations: “Outsourced services and increased regulatory compliance has deskilled HR practitioners and stifled the innovative synergistic role that HR can provide and which is sadly lacking across many organisations.” A manager’s ability to innovate and demonstrate leadership is undoubtedly vital. But Steve Bailey thinks that the HR sector is being held back: “There’s a general lack of internal capability and organizational recognition,” says Bailey. “The ability of HR to be visible as change agents, leading from the front and embracing the advantage of technology is a current opportunity that should not be lost.”
Why is this vital? Because as - at least some - economies emerge from a period of prolonged recession and economic uncertainty, the resultant shortages of human resources, skilled and otherwise, are recognised as holding back growth and productivity - not only in organisations but also across market sectors and political groupings. The labour market is - mostly - very comfortable with technology and generally has high levels of IT self-sufficiency. The distinction between home and places of work – not necessarily ‘office’ anymore are breaking down rapidly. Steve Bailey believes that HR has the opportunity to embrace these characteristics including the adoption of agile methodology to deliver large scale projects. But it must happen now. “The longer the process becomes, the more chance it’s going to be made redundant by time,” agrees Sir Cary. “People need to feel part of the process, particularly technological change. We have to get them involved. The simpler it is the better.” It’s not the fault of managers, defends Mr Bailey: “HRs are often handicapped by a lack of awareness of what is happening within their business. This is often compounded by using recruitment agencies, outsourcers and other third party services.”
“A lot of people are frightened of change generally,” warns Professor Cooper, “so we have to get them engaged in the change process. And sometimes the introduction of technology is so long and cumbersome, and so complex that they get fed up. So do it quickly, be experimental.
“Activities such as restructuring, M&A strategy, customer relationship activities and CSR initiatives all have significant HR requirements,” says Bailey, “but HR are so often unaware of the issues that they can’t plan for the impact on the HR resources required by the business. Product launches, for example, can impact on the skills required to market and sell products. Call centres and support desk decisions naturally involve HR. New products can also have a detrimental effect on existing or established products, triggering decisions that HRs need to be involved in.
“I like the idea of Lean Technology,” says Sir Cary, “because in a sense you’re going to try something and you’re not going to spend a lot of time. If it doesn’t work, dump it. And go on to the next idea. The quicker you do that the better. “
Steve Bailey’s list of HR ‘knowledge needs’ brings with it the need for large amounts of data. Undoubtedly the knowledge - if used well by HRs - will underline their value to an organisation . But it does present problems in ensuring the security of the data
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and enabling appropriate and controlled access. The protection of these data sources is a fundamental business requirement. “In my experience.” Says Steve Bailey, “HRs are generally early advocates in the recognition of the intellectual property within organisations. This can range from people skills to technology patents and these assets are infrequently valued in the financial records and accounts published by organisations. Yet they do often represent the real market value of an enterprise, so the adoption by HR of secure technology in protecting these assets will elevate their position. “ “Only by challenging and re-imagining the best way to meet HR needs can any business ensure continued relevance and success,” adds Richard Converly, who issues a stark message: “If we hang on to the past too tightly, it’s only a matter of time until we realise a brighter future has slipped through our fingers. Think about how the music business, print advertising and traditional publishing have all suffered because of the failure of those industries to understand and respond to new technologies and trends - the HR sector has had fair warning.”
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The Bank of America
Expansion
CashPro® Invest, an online liquidity management and investment order entry tool, is now available for use by Bank of America Merrill Lynch clients in Europe.
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company serves approximately 48 million consumer and small business relationships and operates approximately 4,800 retail banking offices, 16,000 ATMs plus online banking, with 31 million active users and approximately 18 million mobile users. Among the world’s leading wealth management companies it is a global leader in corporate and investment banking and trading across a broad range of asset classes. Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation. “With this service, our clients have the critical, timely information they need to manage their investment decisions, and a streamlined process to place current- or future-dated orders.” CashPro Invest is fully integrated with CashPro Online, BofA Merrill’s corporate banking portal. CashPro Invest offers investment execution and extensive research and reporting capabilities for money market mutual funds, the primary investment product solution for daily liquidity needs. With CashPro Invest, clients are able to: • View investment account balances. • Research and compare money market mutual funds. • View and download transaction history and other reports. • Customize controls to support company investment policy. In addition, clients in Europe are able to enter investment orders for money market funds across currencies. “The addition of CashPro Invest to our CashPro Online portal is an important enhancement for our 16 • CorporateAmerica • September 2015
clients in the region,” said Jennifer Boussuge, head of Global Transaction Services for Europe, the Middle East and Africa at BofA Merrill. “Now, it is easier and simpler for our clients to stay connected with us for making their routine transactions, checking and analyzing their transaction history, and doing research to help develop strategy for future transactions.” CashPro Invest is primarily used by clients of BofA Merrill’s Global Liquidity Investment Solutions (GLIS) group, a team of highly experienced, consultative investment specialists who can provide end-to-end liquidity and investment solutions. The GLIS team recently expanded into Europe with the opening of an office in London. “Through CashPro Invest, our clients in Europe can now more easily execute investment orders, using the same sign-in and navigation they already are familiar with using CashPro Online,” said Greg Kavanaugh, head of Global Core Cash Management at BofA Merrill. “With this service, our clients have the critical, timely information they need to manage their investment decisions, and a streamlined process to place current- or future-dated orders.” The geographic expansion is the first since BofA Merrill developed and introduced CashPro Invest in the United States. Close to home Bank of America recently strengthened its own leadership structure in Charlotte North Carlolina where its shareholders approved a proposal to ratify the 2014 amendments to the company’s bylaws that permitted the board of directors to determine its leadership structure, including appointing an independent chairman or appointing a lead independent director when the chairman is not an independent director. At a special meeting of shareholders, the company made announcements of preliminary results of the shareholder vote, where approximately 63 percent of shares voted were cast in favor of the proposal. The vote results announced at the meeting are considered preliminary; final results will be reported on a Form 8-K filed with the Securities and Exchange Commission.
“We held today’s vote in direct response to extensive shareholder engagement,” said Lead Independent Director Jack Bovender; “We appreciate the opportunity so many of our shareholders gave us to discuss this issue, and our board looks forward to continuing this constructive engagement.” Chairman and CEO Brian Moynihan said, “We are pleased our shareholders had the chance to express their views, and we appreciate their support to continue driving our company forward for them and for our customers and clients.” Additionally, the board authorized a regular quarterly cash dividend of $0.40625 per depositary share on the 6.50 percent Non-Cumulative Preferred Stock, Series Y. The dividend is payable on October 27 to shareholders of record as of October 1. The board continued to authorized a regular semi-annual cash dividend of $32.50 per depositary share on the Fixed-to-floating Rate Non-Cumulative Preferred Stock, Series Z. The dividend is payable on October 23 to shareholders of record as of October 1. Finally Bank of America, staying up-to-date with latest technology, announced a series of improvements to mobile and online banking to better meet customers’ changing needs and make it easier for users to manage their finances digitally. The new updates include the introduction of fingerprint and Touch ID sign-in, in addition to the launch of an Apple Watch mobile banking app, streamlined “Accounts Overview” page and new Security Center for more than 31 million active digital banking customers. “We continue to deliver enhancements that provide our customers a more seamless and secure banking experience,” said Michelle Moore, head of digital banking at Bank of America. “This is another example of how we are helping our mobile and online banking users simplify their financial lives.” The new fingerprint and Touch ID sign-in capabilities provide eligible Android, iPhone and iPad customers with a secure and convenient way to log into the mobile banking app using their fingerprint. This feature allows access to the most common functionality of the app
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Feature without the additional need for a passcode. As part of the bank’s ongoing commitment to staying ahead of advancements in mobile device authentication, the technology supporting fingerprint sign-in was built according to FIDO (Fast IDentity Online) standards. The mobile banking app is now compatible with Apple Watch, allowing users to view account balances and recent transactions for their linked checking, savings, credit card and investment accounts, as well as receive real-time alerts and notifications on their wrist. The functionality requires enrolment with Bank of America’s mobile banking app and is compatible with iPhone 5 devices or later, operating on iOS 8.2. The mobile banking app home page and online banking “Accounts Overview” page have been redesigned to improve user experience. Mobile banking app users will be given new quick link tiles, providing faster access to popular features including: mobile check deposit, appointment scheduling and new account opening. The update also includes the addition of the What’s New section, further educating customers on the functionalities available to them. The mobile banking app home page and online banking “Accounts Overview” page have been redesigned to improve user experience. Mobile banking app users will be given new quick link tiles, providing faster access to popular features including: mobile check deposit, appointment scheduling and new account opening. The update also includes the addition of the What’s New section, further educating customers on the functionalities available to them. For online banking customers, the home page redesign makes it easier to review account information at a glance, including a new Quick View function that displays the last five transactions and a link to the most recent statement. A newly created Activity Center provides users access to popular features, including the ability to view and pay eBills, transfer money between accounts and review special offers and deals without leaving the page. The launch of a new Security Center offers mobile and online banking customers more tools to securely manage their finances, including additional options for signing into and monitoring activity on their accounts. Customers can manage their digital banking security settings in one place and opt into an extra security feature at sign-in. The Bank by Appointment feature has been updated to allow mobile/online banking customers to schedule same-day financial center appointments with specialists for everyday banking, investment, retirement, home loan and small business needs. The enhancement also includes a streamlined customer experience and an Add to Calendar option, which populates the appointment to the personal calendar on the device. Bank of America customers schedule more than 15,000 appointments per week via this feature. This new functionality will provide users more streamlined and quicker access to the proper associate to address their needs and can be accessed from several mobile banking pages. This feature is currently enabled for Preferred customers, and will be rolled out more broadly over the next month. As finance is linked inextricably to technology, mobile banking platform remains a key source of increased customer engagement and satisfaction with more than 18 million active users, growing at a rate of approximately 5,000 users per day which is why banks such as The Bank of America is focussed on customer driven mobile banking experience. The bank announced that during the second quarter of 2015, mobile banking customers logged into their accounts more than 620 million times, or almost 35 times per user. During that same period, customers made nearly 900,000 mobile bill payments and money transfers each day. Customers also used their mobile devices to deposit more than 215,000 checks via mobile check deposit every day, and logged in 32,000 times to schedule appointments with a personal banker or financial center specialist. 18 • CorporateAmerica • September 2015
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Sustainable Finance
How are our finances linked to the weather? There is little doubt that our environment is an issue of finance as much as anything else, from the costly effects of natural disasters to, creating more sustainable work environments, green really is the color in demand.
With droughts in the West, floods in Texas and tornadoes in the Midwest there is arguably an increasing severity of storms. Along the American Eastern Coast as well as further to the South there is still the fallout from the effects climate change. You don’t need a crystal ball to know that this will have lasting effects on owners, investors and lenders of commercial real estate throughout the U.S. The effect of climate change on due diligence is unique and impacts in a variety of areas of real estate. AS situations develop, conservation measures put into place in regional state and federal markets will effect property owner’s responsibilities. Investors should be wary of the current ‘climate’ as impending changes, such as the rising of average annual temperatures and sea levels to name but a few effects, will have wide scale ramifications of a variety of commercial and financial projects. The Federal Emergency Management Agency (FEMA) had rezoned parts of Lower Manhattan and the surrounding New York City boroughs, in the wake of the effects of Hurricane Sandy, as a result of insurance claims. Concerns of rising sea levels and increase on snow removal costs makes New York a more perilous state for construction than ever. New Builds, as well as existing structures, have to consider extra design requirements for flood protection with insurance coverage requiring more due diligence prior to adjustments taking place. Across the globe, companies in the public, private and third must take measures to reduce carbon emissions. Changes to everything from logistics of building materials to electrical and plumbing connections are in a state of flux to see where the most money via sustainable options can be saved. While some seem content to argue about the causes of climate change, environmentally conscious owners are already conserving energy and reducing emissions at their properties, at considerable expense however. A recent report of public and private sectors concluded that between $66 billion and $106 billion 20 • CorporateAmerica • September 2015
worth of existing coastal property will be below sea level by 2050. In 2013, a report from FEMA stated that in U.S. areas at risk of flood could increase by 45 percent by 2100, mainly because of climate change. While New York contends with floods, California has the opposite problem. A state of emergency was declared in California not long ago, placing restrictions on water usage which, consequently, resulted in serious effects on commercial real estate operations, management and development. Wildfires, always a threat to California, were more problematic and halted project developments were costly to companies causing in turn considerable increases in insurance premiums affecting the value of the underlying real estate. It isn’t just the real estate professionals and their due diligence providers who need to stay abreast of these situations though. Buyers should be look for investments with plans which will address the need to conform to stricter environmental regulation. Many companies will use the environmental issues to their advantage, garnering publicity and a positive public image, such as Apple who in among 13 major US companies pledging $140 billion to fight the effects of climate change and buttress the current administration’s quest to combat climate change.
“Voluntary commitments alone will not get us the meaningful reductions we need,” she said. “Strong carbon-reducing policies are hugely important.” The White House said the companies’ promises would lead to at least 1,600 megawatts of new renewable energy being brought on line. Water-use intensity would be reduced by 15 percent and the companies would target zero net deforestation in their supply chains. In a blog post on Google’s website, CEO Eric Schmidt said while the private sector can play a leadership role on climate change, it needs political certainty to encourage companies to scale up their investments. “We need the world’s political leaders to confirm that investments in clean energy are sound, and that the laws and policies meant to enable such investment will be designed for the long term,” Schmidt wrote. Not to be outdone, Apple pledged to bring nearly 300 MW of renewable energy online in five states and the Sichuan province in China.
Google, Apple, Goldman Sachs and 10 other wellknown companies joined the White House in launching the American Business Act on Climate Pledge, a campaign that the White House said would inject $140 billion in low-carbon investments into the global economy.
Other Financial initiatives to combat climate change have not fared so well recently. Three years after California voters passed a ballot measure to raise taxes on corporations and generate clean energy jobs by funding energy-efficiency projects in schools, barely one-tenth of the promised jobs have been created, and the state has no comprehensive list to show how much work has been done or how much energy has been saved. Money is trickling in at a slower-than-anticipated rate, and more than half of the $297 million given to schools so far has gone to consultants and energy auditors.
Private sector commitments are essential to achieivng global agreement on climate change; some nations demand an agreement including tens of billions of dollars in financing from developed nations to allow economies adapt a low-carbon future.
Voters in 2012 approved the Clean Energy Jobs Act by a large margin, closing a tax loophole for multistate corporations. The Legislature decided to send half the money to fund clean energy projects in schools, promising to generate more than 11,000 jobs each year.
Mindy Lubber, president of environmental investor group Ceres, applauded the announcements but said the White House cannot rely solely on these pledges.
“Accountability boards that are rubber stamps are fairly common, but accountability boards that don’t meet at all are a big problem” - Douglas Johnson
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Feature Instead, only 1,700 jobs have been created in three years, raising concerns about whether the money is accomplishing what voters were promised. “Accountability boards that are rubber stamps are fairly common, but accountability boards that don’t meet at all are a big problem,” said Douglas Johnson, a state government expert at Claremont McKenna College in Southern California. The State Energy Commission, which oversees Proposition 39 spending, could not provide any data about completed projects or calculate energy savings because schools are not required to report the results for up to 15 months after completion, spokeswoman Amber Beck said. Still, she said she believes the program is on track. The office of Senate President Pro Tem Kevin de Leon, D-Los Angeles, previously estimated LAUSD would save up to $27 million a year on energy costs; projects proposed by the district so far would save only $1.4 million. Officials around the state say they intend to meet a 2018 deadline to request funds and a 2020 deadline to complete projects. They say the money will go to major, long-needed projects and are unconcerned schools have applied for only half of the $973 million available so far, or that $153 million of the $297 million given to schools has gone for energy planning by consultants and auditors. “If there’s money out there, we’re going for it,” said Tom Wright, an energy manager for the San Diego Unified School District. Unlike many other districts, SDUSD has received $9.5 million of its available $9.7 million. Leftover money would return to the general fund for unrestricted projects of lawmakers’ choosing. The proposition brings in millions less each year than initially projected. Proponents such as de Leon and billionaire investor and philanthropist Tom Steyer , told voters in 2012 that it would send up to $550 million annually to the Clean Jobs Energy Fund. But it brought in just $381 million in 2013, $279 million in 2014 and $313 million in 2015.
There’s no exact way to track how corporations reacted to the tax code change. Of course not all organizations experience this type of problem with their ‘Green’ initiatives. Recently, Zenith Motors signed a DHL Express USA Electric Delivery Truck Deal, Increasing Orders of UQM Technologies PowerPhase Pro® 135 for the Medium Truck Delivery. The Zenith delivery vehicles are powered by the UQM PowerPhase Pro® 135 propulsion systems. A major emphasis for UQM is developing propulsion systems for electric, hybrid electric, plug-in hybrid electric and fuel cell electric vehicles. The high efficiency of UQM PowerPhase systems provides higher value to the customer, as well as enables vehicle manufacturers to meet their all-electric range goals and compliance with stricter emissions standards. “Zenith has been greatly anticipating this order with DHL and is excited to have the opportunity to showcase the UQM powered full-electric delivery vehicles,” said William Yung, CEO of Zenith Motors, LLC. “Orders have been picking up steadily with Zenith Motors and this contract with DHL is a good sign for Zenith and their growth in the EV delivery vehicle market” DHL has invested nearly $50 million in their fleet over the last two years, reducing average vehicle age from 6.7 years in 2012 to 3.6 years today. This purchase is a part of a clean vehicle initiative by DHL to add a variety of clean vehicles to its US fleet this year. According to DHL, this initiative will make their fleet one of the newest and most modern in the industry. “Orders have been picking up steadily with Zenith Motors and this contract with DHL is a good sign for Zenith and their growth in the EV delivery vehicle market,” said Joe Mitchell, Chief Operating Officer and Interim President and CEO of UQM Technologies. “As other major fleets begin to see the merits of electric vehicles and the efficiency and reliability of the UQM drive solutions, we anticipate seeing more good news like this.” No matter the cause, the effects of climate change are permeating throughout every avenue of our society. From natural disasters to innovative solutions the economy is not above the escalation of environmental turmoil.
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Xerox Named to Dow Jones Sustainability Index For the second consecutive year, Xerox has been named to the Dow Jones Sustainability Index for North America. Launched in 1999, the Dow Jones Sustainability Indices evaluate the sustainability performance of the largest 2,500 companies listed on the Dow Jones Global Total Stock Market Index. Companies are selected for the indices based on a comprehensive assessment of long-term economic, environmental and social criteria that account for general as well as industry-specific sustainability trends. “Inclusion in the Dow Jones Sustainability Index is a source of pride for our employees, building on our history and belief that sustainability is achievable with innovation and ingenuity,” said Diane O’Connor, vice president, Xerox Environment, Health, Safety and Sustainability. Xerox has a long-standing commitment to environmental sustainability that began more than 30 years ago with the introduction of two sided copying and continued over the decades with innovative solutions such as power down mode for office equipment and electronics remanufacturing. More recently, Xerox introduced a number of transportation solutions to enhance urban mobility, such as: the Merge® smart parking system, which uses occupancy data from meters and sensors to vary pricing hence availability, and the Xerox Print Awareness Tool, which provides end-users with graphical displays of their print usage as well as “eco-tips” to enhance sustainability awareness and choices. In 2003, the company made a public commitment to reduce Green House Gas (GHG) emissions, exceeding initial expectations, and subsequently cutting energy consumption by 31 percent and GHG emissions by 42 percent - that’s 210,000 tons of carbon dioxide equivalents. 24 • CorporateAmerica • September 2015
“More and more, investors look at companies’ environmental policies and track records in making their investment decisions,” said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “The Dow Jones Sustainability Indices are comprehensive benchmarks that allow investors to gauge the collective performance of those companies.” Xerox also has retained its position for the eighth consecutive year on another corporate responsibility benchmark by meeting the FTSE4Good criteria for corporate responsibility, social and stakeholder engagement, human rights and environmental actions. Xerox is helping change the way the world works. By applying our expertise in imaging, business process, analytics, automation and user-centric insights, we engineer the flow of work to provide greater productivity, efficiency and personalization. We conduct business in 180 countries, and our more than 130,000 employees create meaningful innovations and provide business process services, printing equipment, software and solutions that make a real difference for our clients – and their customers.
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Solar Power is the Way Forward Equal Earth is a leading independent power company providing homes and businesses with renewable, solar electricity. We believe in a clean energy future and freedom of choice, especially when it comes to utilities. We own and operate solar facilities across the United States and are committed to helping customers pay less for power. Equal Earth is a new kind of Energy Company. One which is company focused on producing and delivering clean power for less than your current utility provider. We believe in a sustainable world, a world where power can be produced without harming the environment. We also believe that all this can be accomplished cost effectively. As a clean energy services company, we are excited to be providing renewable energy power to commercial and residential customers in Hawaii, California, Colorado, Fiji and Guam, alongside more states and new markets to follow later this year.
We are on a mission to drive increased community adoption of solar power and are committed to delivering economic and environmental returns for our shareholders.
Equal Earth is a part of the solar revolution and we are out to change the way the world is powered. Our goal is to deliver clean renewable energy to the masses and to empower others with energy independence.
Today, a new solar installation is completed in the United States every 2.5 minutes and more than 91% of Americans support solar power, according to a 2015 Gallup poll. At present, customers could reduce their utility bills by up to 20-30%, which could save them thousands of dollars over the space of a year.
We own and operate solar facilities throughout the United States and our portfolio of projects includes solar systems for residential, commercial, education and government customers. Equal Earth’s solar facilities generate long-term cash flows in attractive markets, providing the company with a solid foundation for continued growth and investment.
We have disrupted the energy industry by providing solar-generated electricity directly to customers for less than they spend on utility rates. Rising retail electricity prices, coupled with inelastic demand, have created a massive growth opportunity for clean, affordable solar energy. Our ownership of solar assets and our business model involves long-term, multi-decade contracts that allow customers to save money on their utility bills while generating recurring, predictable cash flows to Equal Earth. Our core values never change. We always ensure that we deliver quality and excellence in all we do. At all times we require a premium return on assets. We maintain to value our employees and our company behaves responsibly as a corporate citizen. Equal Earth sponsors professional athletes who inspire us and who represent the core values of our brand. These athletes are among the very best triathletes in the world, and important partners in helping us to evangelize a clean energy future. Every day, Equal Earth athletes are out in the community helping raise awareness about the economic and environmental benefits of solar power. As Equal Earth continues to grow, so does our impact on the communities we serve. Examples of how we work with the community are through our partnerships with different athletes that we are very proud of. Equal Earth has a very positive reputation, boasting 53 US employees - a figure that is constantly growing. As of June 2015 the business has 65 Megawatts under contract and 300 Megawatts in the pipeline, which represent the high volume of work that the business carries out and how hard the company works as a whole.
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M&A Integration Looking Beyond the Here and Now What happens AFTER the deal closes determines its true value. AI talked with Conduit Consulting’s founder and Managing Director Jillian Alexander who, unlike most deal advisers, has extensive buy-side experience advising on and managing transactions from conception through integration. She has garnered a reputation for ignoring bad deals and swiftly get deals done, including those others could not close. And, 100% of the deals she advised on which closed have been accretive. What determines whether an M&A deal will be accretive or dilutive? Buyers need to have a realistic plan of how the entities will not only be combined to generate profits exceeding that which the companies would earn independently, but also quickly recoup acquisition, integration and business transformation costs so that it may realise a healthy ROI on the transaction. When it comes to M&A Integration, many companies fail to seriously plan beyond the here and now. Approaching a deal envisioning postacquisition operations facilitates identifying opportunities and risks and assessing the true realisable value of the transaction. When should the M&A Integration plan be developed? Ideally, the post-acquisition integration and business transformation planning occurs before the deal closes. Effectively communicating both the merger and the vision of the fully-integrated company to all employees and key external stakeholders upon closing the deal typically leads to more confidence in management and support for the deal. What sort of support do senior management teams commonly need to smooth postmerger integration? M&A Integration goes well beyond integrating systems and processes, it involves revising business strategies and refining corporate cultures, and touches humans on a level that can be more impactful on the businesses than any other initiative. Very few companies have internal resources whom
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have had repeated successes planning and managing these extremely complex initiatives. Companies generally need their most talented resources focused on day-to-day operations – working with vendors and customers as well as making sure personnel are performing every day manufacturing, marketing, accounting, cash management, and other business activities without disruption rather than seeking new positions elsewhere. Clients draw on the considerable talents, knowledge, and transaction and transformation expertise of Conduit Consulting’s seasoned professionals. Our experience and knowledge enables us to foresee changes in the competitive environment and anticipate internal and external stakeholders reactions, and facilitate creating the “to-be” company’s goals, strategies, organization, processes, systems, culture as well as the workplan to migrate from where they are today to where they want to be with minimal disruption. Takeovers success are often dependent upon integration after a deal has been agreed. How has integration changed in today’s increasingly global market? I have been managing in businesses dealing with globalised products and cross-border hand-offs my entire adult life. So, to me, telecommunications infrastructure and improved hardware and software have made work simpler… and it is significantly faster to build rapport, get answers and move forward.
How do other deal advisors feel about your firm being involved? Other advisors and clients have expressed appreciation for Conduit Consulting professionals’ helping them avoid pit-falls and our uncanny ability to identify the elements that will be most contentious and challenging. By doing so, we can then plan and manage the situation so that due diligence, deal closing, transition, and business transformation are all relatively frictionless. What sets Conduit Consulting apart from its rivals and how do you use this differentiation to your advantage? Saving clients own time and effort while accelerating their companies’ profit growth and enhancing enterprise value is Conduit Consulting’s forte. We place a high value on providing appropriate guidance, creating high-quality relevant deliverables, and performing work right the first time. Additionally, how we engage with clients and other advisors not only rapidly builds rapport, but also has resulted in Conduit Consulting being repeatedly recognised for its strategic management, business model design, product innovation, strategy development, and other consulting services. Over the last 12 months, Conduit Consulting LLC has continued to grow as a company but what has its biggest achievement been? Attracting talented professionals to join our team. It isn’t easy to find people with the intellectual capital, professionalism, personality, wisdom, and skills necessary to service Conduit Consulting’s clients well.
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Feature What do you anticipate will be fueling M&A activity in your region in the next 12 months? United States labor laws, tax rates, and reporting requirements are less business-friendly than many other nations. Add to that California’s labor code, tax rates, reporting requirements, and real property cost, and it is a wonder why more businesses did not merge for tax inversion or other profitability improvement purposes.
What do you expect to be working on during the coming year? We look forward to enhancing capabilities and value within a few up-and-coming and established corporate clients owning well-known brands, devising their acquisition strategies, confidentially sourcing and engaging targets, managing due diligence and orchestrating merger integration. Additionally, we expect to help clients seeking to realise greater value from their assets with new market entry, product innovation, new venture development, reorganisation or other goal-setting transition planning, as well as transaction and transformation management activities.
About Conduit Consulting LLC Conduit Consulting LLC provides corporate development advice and support spanning strategy, transaction advisory and general management to companies ranging from large multinational corporations to small private enterprises. Its professionals’ client-specific confidential advice and efforts efficiently leading all or aspects of strategic cross-border and domestic transactions have resulted in successful market entry, product pipeline and service capability enhancement, operational performance improvement, profitability growth, increased enterprise value, and more than $3.4 billion realized through IPO, M&A, and private placement transactions.
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Emerging Trends in Securities Litigation Baskin Richards PLC represents individuals, businesses and governmental clients in a wide range of litigation and general legal advice areas, including prosecuting and defending claims involving federal and state securities laws, commercial disputes, intellectual property and non-compete matters, administrative proceedings, and civil rights issues. Alan Baskin is the co-founding member/owner of Baskin Richards PLC. He is a trial attorney whose practice emphasizes securities arbitrations, securities enforcement and regulatory matters, commercial litigation and white collar criminal cases. During the last 25 years Alan is the only attorney to obtain a fee award against the Arizona Corporation Commission in a securities case; he has done so twice, with the second case leading to a change in Arizona’s securities laws. He has enjoyed similar success in securities arbitration. He is one of a handful of attorneys to have obtained a 7-figure award in an Arizona NASD (now FINRA) arbitration, and has settled cases involving many millions of dollars. He also successfully defended and obtained an award of attorneys’ fees against a brokerage firm that attempted to attach a client’s assets prior to initiating an arbitration. Over the past several months Alan persuaded the two primary U.S. securities regulators (SEC and FINRA) not to initiate proceedings against two different clients in two separate matters. Also, after a 3 day hearing he persuaded the court to dissolve a TRO issued against a client in a trade secrets case. Alan represents clients who are under investigation or are subject to enforcement proceedings brought, by the Securities and Exchange Commission (SEC), state securities regulators such as the Arizona 30 • CorporateAmerica • September 2015
Corporation Commission and by self-regulatory bodies such as the Financial Industry Regulatory Authority (FINRA). He provides clients with both practical advice and creative options only counsel with deep and diverse experience can offer. Alan takes a genuine, caring approach and provides timely and efficient legal solutions to help each client reach their goals. The cases Alan handles are not just about numbers and dollars. They are about people and relationships. Helping people is Alan’s priority, including those who may have lost some or all of their retirement savings, whose business may be under attack, who are under stress from being sued or receiving government subpoenas, or who are simply seeking to protect their important financial interests. No matter what type of case, providing personal attention and getting the details right is the priority. The future looks bright for Alan’s firm and in the next 12 months he hopes to continue to grow the firm and provide clients with both practical advice and creative options by taking a genuine, caring approach to every legal matter and providing timely and efficient legal solutions.
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Anticipating Acquisition Surprises Acquisitions are among the most far-reaching, ambitious business decisions that senior executives may face in their leadership of a company. And while the opportunities enabled by acquisitions are often compelling, the effective management of an acquisition process and realization of value depends on anticipating and preparing for post-closing surprises. From the perspective of a CEO or CFO, such anticipation and preparation requires looking beyond diligence checklists, beyond inflexible integration plans, and beyond the false security of a single representation of how the future combined business will perform and evolve. This overview will describe the benefits of an acquisition due diligence campaign driven by areas with greatest potential for surprise. This approach to due diligence provides more actionable input to deal evaluation and integration planning, as such better preparation for the inevitable surprises from acquisitions. Confirmatory due diligence ≠ due diligence Evaluation of potential acquisitions involves a wide range of audits, assessments and analyses that are intended to inform a prospective buyer’s decisionmaking and to prepare for the days and months of post-closing integration work. While some executives may reflexively reach for due diligence checklists, certain areas of greatest potential for post-closing surprises, notably those related to people, customer relationships, and company culture, simply aren’t conducive to checklists. Confirmatory due diligence assessments, including quality-of-earnings reports; review of accounting, tax, and legal records; and environmental studies often have potential to serve as “red flags” for valuation of a transaction or as inputs to contractual negotiations for indemnifications or disclosure obligations. However, diligence efforts must also include more subjective and dynamic areas such as strategic sourcing relationships, operating capabilities, customer relationships, company leadership, organizational strength, and competitive response. The more subjective of areas of due diligence may be more inherently more challenging to assess, though these are often essential to the anticipated value of the acquisition. In a recent study by Joseph Feldman Associates of middle market acquisitions, interviews with nearly ninety company executives and advisers identified
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post-closing surprises as more typically found outside of typical confirmatory due diligence areas. Over reliance on diligence checklists may under-emphasize important pre-closing diligence in areas with highest surprise risks, such as talent/organization, customer/market, and integration-focused operations assessments. As such, beware of checklists! And expect that most acquisitions will encounter the unexpected after closing. Savvy acquirers may increase their effectiveness in handing those surprises through more deliberate pre-closing diligence in areas of inherently greatest uncertainty. Organizational surprises “Proper assessments of people who aren’t your employees may be impractical. That said, acquirers should temper their optimism that the target’s management will be just fine. Planning for more changes, perhaps many more changes, in the target’s team would be sensible in most cases I’ve worked with,” counseled a Senior Vice President of Human Resources with two decades of acquisition diligence and integration experience. Over 80% of those interviewed in our research indicated that all or most senior management of the acquired firm was retained post-closing. Yet 40% of those interviewed encountered “organization and people” post-closing surprises following the acquisition. As a middle market company Board of Directors member reflected, “…we found out after the acquisition that the management team did not talk to each other. During negotiations they had presented the team as a tight group, and in reality they had very diverse views regarding the future of the company.” Acquiring a business often reflects the assessment of whether the target company’s leadership and organization have operated effectively, and the outlook for their doing so in support of future growth and value to the acquirer. It is important to
recognize that post-acquisition ownership may bring new expectations, different priorities, and often an accelerated plan for growth, any of which may lead to organizational surprises. Further, the acquired company’s management may have been well-suited to an earlier phase of its existence, while ill-suited to managing as part of a larger enterprise. The leader of a manufacturing company described the management team of an acquired business as “totally competent in running the business; totally incompetent in doing things differently to grow it.” Customer and market-related surprises Establishing a clear understanding of a target company’s customers and market position is critical to assessment of value and risk. However, that clear understanding may be elusive for several reasons inherent in an acquisition process, thus potentially leading to post-closing surprises. First, many prospective sellers limit direct access to customers during a sale process, whether for competitive reasons, toward minimizing disruption of ongoing business relationships, or reflecting limited internal disclosure to their sales organization of the pending consideration of a company sale. The “acquired company did what they could to keep the acquiring company from talking with customers in detail,” reported a C-level executive in the home services industry. This common constraint on diligence may lead to unexpected outcomes post-closing. Second, certain customers may be prompted by the change in ownership to seek new pricing, consider competitive offers, or perceive new risks in their relationship with the target. Clear determination of the risk of such potential actions may be speculative in advance of a transaction. The CEO of a consumer products company encountered a major customer loss shortly after an acquisition closed. While this possibility was considered for integration planning and valuation
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Feature purposes, the impact required a few years to recover. The CEO identified two notable learnings: “first, we hadn’t adequately tempered our projections for Year One post-closing to account for the unknown; doing so would have been prudent vis-à-vis our investors, without needing to ease expectations from our sales team or retained management; second, for product line acquisitions, the right transition time for our key sales relationships is immediate; individual accounts matter too much to defer integration.” Finally, the target company’s unique vantage point in an evolving market may be simply beyond the view of a potential buyer, notwithstanding careful interviews with management or outsiders with perceived expertise on relevant trends. Scenario analyses As described above, the risk for major post-closing surprises may be highest in more subjective business areas such as related to organization, customers, competitors, and broader market conditions. Such surprises are far beyond the scope of checklists that may provide a false assurance that all the bases have been covered. How can an organization contemplating an acquisition do better at anticipating the wide range of possibilities that might happen?
can assure operational input into the deal valuation and key operational risks. Market-facing executives often have relationships with companies that may be interesting acquisition targets or have insights regarding companies whose market position or business practices would make it unattractive. Further, operations executives will add certainly value to scenario analyses and planning to consider the range of post-closing outcomes for related to customers, strategic suppliers, and competitors. Summary “Great strategy, planning and integration execution are essential, but not sufficient to ensure success with acquisitions. There will be surprises”, reflected the chief executive officer of an industrial products company. And while unforeseen developments may sometimes limit an acquisition’s impact, other surprises can also prove quite positive as previously unforeseeable opportunities are realized.
Acquiring firms are advised to take a broad view of pre-closing diligence, considering both traditional “confirmatory” diligence along with more subjective efforts to understand an uncertain future. After all, companies prepared to consider acquisitions among their options may thereby achieve growth and competitive position that is otherwise unachievable. Joseph Feldman is President of Joseph Feldman Associates, a Chicago-based corporate development consulting firm founded in 2003. Joseph Feldman Associates provides acquisition and other strategic transaction consulting for growing companies and their investors. For more about acquisition surprises, download “Middle Market Acquisitions: If I Had Only Known” at www.josephfeldman.com
For many companies, the use of scenario analysis can provide a planning tool that overcomes fundamental uncertainty or ill-preparedness ahead of completing an acquisition. In brief, scenario analysis prompts a company’s leadership to think about those important aspects of the future, especially considering factors over which the firm may have little or no control. These might especially include competitive response to the acquisition from suppliers, customers, government, and individuals whose careers may be impacted by the deal. Imagination becomes an essential ingredient to effectively considering a range of alternative futures that might require action by the company. And while scenario analysis may be a routinely useful exercise, the greater uncertainty and newness associated with acquisitions may make such “what if” thinking far more critical to a company’s success. According to Patrick Marren, Principal of the Futures Strategy Group, LLC, a leading scenarioplanning consultancy, “Scenario planning can help organizations identify key market fault lines, critical success factors for acquisition, and potential ‘rogue waves’ coming from outside their accustomed context that could disrupt their entire industry. It also allows them to ‘rehearse the future’ in a far deeper way than merely going down a checklist ever could.” Finally, scenario planning can be used in integration implementation as a team-building exercise to bring key people from an acquired entity swiftly up to speed on the acquiring organization’s strategic vision of the future. Start integration planning early... very early Getting an early start with integration planning may be helpful in reducing the risk of surprises and better preparing a company to face surprises encountered. For example, involving sales, marketing, and operations executives in certain pre-closing activities September 2015 • CorporateAmerica • 33
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