Bilot and CastorIT M&A Integration Project in COVID Times

19.10.2021

Bilot and CastorIT M&A Integration Project in COVID Times

Over a year ago in late Spring 2020, I learnt about the planned merger of Bilot Oyj and CastorIT Oy. Subsequently I had the pleasure to lead the M&A integration project of the two companies, and in this capacity I would now like to share with you how we did it in the times when COVID-19 pandemic was limiting face-to-face meetings. Bilot’s slogan is ‘We Stand for More’ and regarding this this specific M&A project I believe that everyone participated did exactly that.


I will cover the project through the following aspects:


Team Structure

For Bilot, and me personally, the Bilot-CastorIT merger was the first major M&A project conducted. However, there was M&A experience in Bilot’s Management Team and we were also supported by an external consultant, so that we did not have to start from scratch. The integration project team initially consisted of Bilot Management Team and the CastorIT Management Team, who also included the co-founders and major shareholders. Later the team was extended by people from different functions.


In some ways this project was similar to the other internal or customer projects I am used to running, but in some ways also it was very different. The similarities were that we had a strict timeline, specific scope to deliver and a team of people with knowledge on the subject matter. The biggest difference was the personal engagement of all the people involved, everybody knew that we had to succeed to secure the future company and our own stakes as shareholders after the merger. I believe we succeeded.

Approach (Gap Analysis) and Processes


We started the preparation by trying to identify any differences in how Bilot and CastorIT work and then close the gaps. The plan was to focus on Bilot processes and identify any possible gaps to CastorIT ways of working. Our processes at the time described all aspects of Bilot operations at high level and each process having a Process Owner. In Bilot there were 16 defined processes and that seemed too detailed for this project, so we have combined them into seven major areas, of which People and Business were decided to be the key areas of focus (see Figure 1). Then we used these areas to map to CastorIT processes and corresponding process owners. We prepared the first draft of the integration plan early on so that it could be presented to the CastorIT shareholders. Already then, we could see that the high-level areas were relatively easy to map to the ways of working of CastorIT.

Figure 1 Bilot and CastorIT initial integration areas

Ways of Working


After the team involved in the integration project had been identified, we agreed on how we were going to work together. Please note, at the initial stage before the public announcement about the merger, we had to keep the preparation activities secret as Bilot is a listed company and we could not disclose the fact of a planned merger to anyone outside of the insiders’ group. Naturally, after the public announcement (Day 1), more people got involved in the integration activities.


The first version of the integration plan described the ways of working and communication channels, preparation activities before Day 1, and then for the following 100 days – something that is quite a standard practice. The initial project plan was presented to the shareholders of CastorIT together with the overall motivation factors behind the merger. It was one of very few meetings that we held even partially face-to-face, as the COVID distancing measures were strongly in place at the time in Finland. For the meeting with CastorIT shareholders we had to use much larger auditorium then it would have been needed otherwise and many of the Bilot Management Team members were only online in the meeting. For me what was different here from many other project plan presentations I had done in my career, was the fact that everybody present were not merely other project members, but all of them were also shareholders in respective companies, and we all knew that the stakes were high for the plan and the project to be successful. In the end, the integration plan did not raise too many questions and we only clarified a few details.


Later on, the deal was agreed and we started preparation of the Day 1, when the merger announcement went public. The integration project plan was slightly modified and we combined areas based on the overlapping process ownership (see Figure 2).

Figure 2 Integration plan with different tracks

We also established all tools and practices in place, according to the initial project plan. We used dedicated Trello for task tracking for each area, we had a common Teams space to chat and share all of the relevant documents.

Communication and Integration Process Governance


We established frequent communication at the whole project level as all track leads and the both companies’ management teams aligned more than a few times per week before the Day 1 and then afterwards on a weekly basis. Naturally, the integration track leads worked at their own pace in their respective areas, and the common status was used only to check the overall progress and possible open issues that we had to resolve. In this kind of project, we would normally have a lot of face-to-face meetings. However, due to the COVID-19 restrictions, most of the meetings were arranged online or in a hybrid mode. Face-to-face meetings in smaller groups were occasionally happening and they helped us to build personal relationships among the project team and build mutual trust.


Otherwise, the way the project was structured, and the objective setting and their monitoring did not differ that much from usual customer projects, where we promise to a customer to deliver a solution, define a project plan and then execute it. The promises made at the beginning are kept, but the details of the initial plan are adjusted to the changing environment.


Summary


We completed the official Bilot and CastorIT M&A integration project in early May 2021. Naturally, the integration is still ongoing but it is not an official project. We still do day-to-day hands-on integration work by delivering customer solutions in teams comprising of former Castorians and Bilots.


I believe that the integration project was successful also looking at our H1 2021 results. However, we did recognise a few areas for improvement, which may help us if we do a similar exercise in the future. The most notable was the desire to work more face-to-face.

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Jakub Rudzki

Director, International Operations

Digitaalisuus ja datalähtöinen kaupallisuus kasvattaa rooliaan voimakkaasti.

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