Unity Bank: Realizing Value from an M&A Integration Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Unity Bank: Realizing Value from an M&A Integration Case Solution

Introduction:

Unity Bank is one of the global shareholder and an employee management service provider. The purpose behind this merger of Delta with Unity Bank is to incorporate Delta’s IT operations into Unity Bank. Stuart Irving, the CIO of the company has been charged with the duty of removing $60 million of expenses in a period of three years.

The goal Unity Bank is that it wants to be the number one provider of fair registry services and to maximize the shareholder’s wealth by minimizing cost of operations. Any newly merged companies should follow the IT governance institutes that mainly focus on strategic alignment, which means they have to adjust their strategic direction, prioritization, and the allocation of resources, even if they have to compromise on their agreements.

The integration of Delta with Unity bank is itself a great step that integrates software, organization’s structure, infrastructure, and its people. This integration affected 60 million accounts in 10,000 organizations globally that employ 800,000 people worldwide with a market capitalization of $ 2 billion.

The objective of the case is to complete the integration in timely manner while achieving its in budgetary goals. Simultaneously while considering the issues of lack of due diligence and use of the legacy systems and deciding on the necessary changes that affects the organizational structure and infrastructure without showing any impact on operations of both companies.

The problem and the Solution:

The major problems facing the leadership of Unity Bank are deciding on a new developing enterprise platform, establishing a new organizational structure by finding and keeping Delta’s star performers in the company.

These problems can be solved and make the integration smooth by following the effective duopoly of IT Governance Institute by focusing on strategic alignment. It provides the strategic direction for allocating resources for alignment of organization’s structure and leverages the shareholder’s value by forming an effective new synergy team.

1. Pre-merger strategies of Unity and Delta:

The Unity bank is a global shareholder IS provider with a market capitalization of $ 2 billion with 60 million shareholder accounts and nearly 8000 employees working in 12 different cities for 10,000 organizations. The services provided by Unity Bank include, agency services, branding services, employee share plan, corporate action services, and complex investment banking transactions.

On the other hand, Delta is the one of the largest corporate shareholder service provider with more than 1300 clients and offer services to 19 million shareholders. Delta also provides transfer agency services and employee plan services.

The pre-merger strategies of Unity and Delta are:

To provide the dedicated integration team to look over and the solve the issues
The successful integration would be profitable for the synergy, economies of scale, revenue diversification, marketing, and the financial advantages. Moreover, it will also lead to reduction in the earnings volatility.
The acquirer company wants to become the world number one service agency provider.
As the Unity Bank have robust and Effective IT services.
The limitation to this integration was lack of due diligence which created problems in incorporating the companies.

A good acquisition for Unity or not:

The integration would be a good idea for both Unity and for Delta. As Unity bank is a small player in US with a market share of 5% and as its platform "Blair" was outdated and unable to cover the cost of maintaining and recovering the platform for long time periods. Due to limited brand recognition, Unity was unable to attract customers with a large investor’s base. Therefore, it would be better for Unity to acquire Delta as it has multiple IT systems and is a market leader in United States with strong brand recognition and a high profile shareholder base..............

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