The purpose of this presentation is to:

• Define Key Stakeholders, and their perceived disbenefits, attitudes and how to adress them.

• Recommend which approach PRG should adopt in the post acquisition process.

• Present the phases, actions and outcomes in the post aquisition process.

• Define the risks in the process, and how to mitigate them.

Todays presentation adresses 3 main questions:

Which perceived disbenefits, and

attitudes needs tobe adressed towards

Key Stakeholders,and how?

Which approachshould PRG adopt in

the post managementM&A process, and

which phases, actions, and outcomes are

expected in it?

Which are thekey risks, and how

should they be mitigated?

Results from former M&As within Orklamight increase the perceived disbenefits !

Former M&As not successfull – Difficult to create value

• Need to adress the perceived disbenefits of the owner (Orkla).

• Important to change current level of commitment, and support among the board of directors, and specially those who represent the owner.

It is crucial that the perceived disbenefits are neutralized among the owners, and management team – otherwise risk of No Deal.

Not a family business anymore – Negative local publicity Risk of layoffs – Change in decision rights

• It is crucial to neutralize the perceived disbenefits of the owners and management team, in order to be able to enter an M&A process.

• Contract a professional third party• Important to pinpoint the key benefits, and reduce

the uncertainty.

A non-approval from customers would jeopardize the M&A!

Not a Danish supplier – Negative power balanceRisk of layoffs

• Important to ”tell a story” to the customers .• Reduce uncertainty.• Important to ”get an approval”, in order to be able

to continue the process.

Conclusion

Conclusion:The key stakeholders, and

their perceived disbenefits,could jeopardize the M&A

if not adressed.

1.Change the perceiveddisbenefits, reinforce

the key benefits.2. Prioritize

3. Get approval customers.

Which approachshould PRG adopt in

the post managementM&A process, and

which phases, actions, and outcomes are

expected in it?

Which are thekey risks, and how

should they be mitigated?

PRG should adopt a gradualist approach in the post aquisition process

• Gives management time to learn- different cultures, national as organizational- the new market, customers and consumers- the company

• Before designing and implementing change.• Supports the Orkla ”multi local model”.

3 important actions to be taken, 6 months prior the M&A. (Phase 1)

Post Aquisition changes:•Set clear specific Goals•Reassure the Mgmt.of Jbs that current leaders stay.

Actions to be taken:•Conduct a cultural audit•Set the overall Goals•Reassure employees

Cultural Factors to be sensitive to:•Language differences•Communication style differences.

Expected employer behavior•Exited management•Anxiety among employees in Jbs

The overall goal is to accelerate the revenue growth, and reach a revenue of $40 millions.

Overall Goals:Accelerate revenue growth+$12 millions, +42%Revenue: $40 millions.EBITDA 14,9% to 18,5%

Specific Goals & Measures:Apply the Balanced scorecard- Financial perspective- Customer perspective- Internal Business perspect.- Innovation/Learning

3 important actions to be taken,year 1. (Phase 2)

Post Aquisition changes:•Implement changes in financial reporting system.

Actions to be taken:•Communicate cultural audit.•Provide traning for changes•Integration team needed.

Cultural Factors to be sensitive to:•Power orientation•Communication differences.•Structures and controls

Expected employer behavior•Increasing resistance to new procedures.•Slow to accept reorganisation

3 important actions to be taken, year 2-5. (Phase 3)

Post Aquisition changes:•Implement necessary common systems.•New products•Move toward Best practice

Actions to be taken:•Gradual change in Jbs Mgmt.•Further training for other changes need to be introduced.

Cultural Factors to be sensitive to:•Communication, measure, and feed back.•Language differences•Monitor behavior•Tolerance to uncertainty.

Expected employer behavior•High level of resistance, due to many changes.•Need consistent and constant communication.

Conclusion

Conclusion:The key stakeholders, and

their perceived disbenefits,could jeopardize the M&A

if not adressed.

1.Change the perceiveddisbenefits, reinforce

the key benefits.2. Prioritize

3. Get approval customers.

Conclusion:PRG should apply thegradualist approach,and implement the

post aquisitionmanagement process.

Which are thekey risks, and how

should they be mitigated?

The Balanced Scorecard (supporting slide)