1. © Patrick Hehir BVG Intl LLC An M&A Case Study
Improving the Chance of Success for
M&A activity :
Real Lessons Learned
from $12B successful
acquisition:
Most research suggests that up to 70% of M&A activity fails to achieve or deliver on expected value. Sometimes
that is based on overvaluing the acquisition, other times it is caused by not being realistic in terms of synergies
that can be achieved and more often it is due to an ineffective integration process and underestimating the people
aspects of that process. This high level paper is being written as a result of the lessons tested and learned in a
very successful acquisition and integration that occurred in the Electronics Manufacturing Services Industry
(EMS) in 2007. In 2007/2008 Flextronics International then $21Billion + in revenues acquired Solectron
International then $12B in revenues. Both organizations had in the region of 30 plus manufacturing and design
operations on 5 continents with combined employee count of well over 200,000.
Without getting into all the details of the history of this low margin industry (gross margin approx 6 to7% and
Op income in the 2-3% range) , the acquisition essentially played a major role in providing some desperately
needed industry consolidation. It is worth noting that the EMS industry went through its massive expansion in
the 1990’s, principally as a result of the incremental acquisitions of the manufacturing operations of their
customers. These acquisitions for sure provided significant practice for the integration processes and stripping of
excess overhead. However many of those acquisitions were relatively small and the conditions leading up to
them were mostly favorable. The acquired operations generally understood the need for the
divestiture/acquisition and had the desire to get integrated effectively, as many felt discarded by their previous
owners. They often viewed their new owners more favorably than the company that divested them. This is
significant as it strongly influences/explains some of the mood and motivations of the acquired employees.
Solectron (SLR), was at one stage the industry leader. Many EMS industry experts gave SLR credit for
establishing high quality operations and for in fact giving the industry much respect and credibility. Flextronics
(Flex) was viewed as the faster growing and more dynamic entity. The acquisition by Flex of SLR took many in
SLR by surprise, but it effectively combined the best of both companies and post integration (post 90 days)
assessments of effectiveness got remarkably high scores of an average of 8.8 on a scale of 1 to 10, using a
change process assessment tool. Additionally Customer satisfaction in the subsequent year increased over 15%
and there was negligible customer attrition or revenue loss which is a tremendously positive occurrence in these
kinds of acquisitions
In preparation for the acquisition, we studied extensively before we implemented our plan and we were
extremely cognizant and aware of the industry failure rate so all our actions were very conscious and deliberate.

2. © Patrick Hehir BVG Intl LLC An M&A Case Study
Two High Level Models:
It is common purpose that during companies integration there are often competing views on the most effective
methodologies to improve the effectiveness and improve the likelihood of delivering on the benefits/value/synergies that
motivated the acquisition in the first place. In addition to that, there are lots of functions competing internally to be in
positions of strong influence to assert their view of what can define success. One of the keys for us was the creation of an
open environment that led to the leveraging of two high level processes.
Change Management Process
We leveraged heavily off an 8 step change management
process (similar to the one below) and it proved crucial.
It was used as a touch stone to ensure that we eliminated
as much risk and uncertainty as possible for the
organization and all people affected. It helped all teams
to confidently and successfully navigate through the
change. We also used it for the post 1st
90 days
assessment to measure both sides view of the
effectiveness of the acquisition.
The BVG Change Model and Diagnostic tool:
Integration Process
We leveraged an integration process after contracting for
an extremely short period of time (6 weeks) with a large
consulting group that helped us develop a very effective
integration process which was then owned and driven by
internal teams. i.e. we leveraged expertise but retained
ownership while we had mentorship and advisors always
available.
The BVG Acquisition Integration Process
Fig 1.0 Fig 2.0

3. © Patrick Hehir BVG Intl LLC An M&A Case Study
Case Highlights:
The following are the brief highlights of the Top 10 elements that were deemed to have been the most important and that
contributed to the successful integration of Solectron into the Flextronics Organization in 2007/2008
1. BOTH companies were in a
heightened state of organizational
readiness.
Prior to the acquisition, Flextronics had just undertaken a
comprehensive transformational re-organization which
began in 2005 as plans were made for a new CEO to be
appointed. The organization was comprehensively re-
structured and we committed to a business unit or market
specialized focus. In addition to that, the organization
was essentially re-purposed and a fresh new vision was
set for the company. Due to the level of change and
uncertainty within the company there had been
tremendous efforts expended to clearly establish a new
management system that essentially defined the anchors
of how the company was designed to function. The
culture was codified in such documents as Vision,
Purpose, Traits and Values. There was also a Blueprint to
explain how to achieve the vision which was combined
with the top non-negotiable’s in terms of how each
company and each business should run. This was also to
be applied to any future acquisitions. We essentially had
a book to follow that listed who we were, where we were
going, how to function and what is expected in order to
succeed.
On the Solectron side, they had just undergone a
somewhat similar revamping or transformation of their
organization as they seriously committed to shedding
excess capacity, committing to a comprehensive business
excellence program and getting their financials in order.
Additionally there existed a recent power gap or
organizational void as the CEO that drove the
transformation had just resigned and moved to another
company. Solectron was essentially in need of some new
direction, new leadership and new energy. The timing
was PERFECT.
2. Clarity of who’s in charge, the reason
for acquisition and the vision were all
clear plus it was easy to explain and
understand.
One key decision that we made early on (which we
leveraged from the Seagate acquisition of Maxtor that
both played in the low margin disk drive space) was that
we made it clear that this was an acquisition and not a
merger. Flextronics was BUYING Solectron. While
being very respectful, we did not want to have any doubt
whatsoever about who was in charge. Additionally we
decided NOT to follow a strategy of trying to get the best
executive team as a result of reviewing talent on both
sides, regardless of how tempting that was. We felt that
we needed certainty and confidence on the Flextronics
side and that all the executives could feel assured of their
positions. We wanted people focused on making the
integration successful We did not want any second
guessing and that is EXACTLY what we got.
3. Speed of integration, clear strategy
and quick decisions
Companies that struggle with acquisitions have often
been surveyed and interviewed. Almost invariably the
executives report that the single biggest regret was that
they wish they executed the integration faster. It is a case
where perfection is the enemy of good. There WILL
ALWAYS be mistakes and imperfections. While that can
never be used to justify avoiding trying to make the best
decision possible, actually making decisions and moving
forward even when there is uncertainty is more
important. Things MUST keep moving and in this

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© Patrick Hehir BVG Intl LLC An M&A Case Study
integration there was NEVER any momentum lost. And
yes there were mistakes made. Some people slipped
through the cracks in terms of clarifying their status for
the future and it was unsettling and unfortunate. But it
was the minority and when mistakes were discovered
they were rectified quickly. Not always to peoples liking,
but at least uncertainty was replaced with certainty which
is what people cherish most during times of change.
4. Strong Executive Driver and detail
oriented Integration Manager.
It is difficult to articulate the value that these two
elements brought. Firstly the Executive sponsor was the
master architect of the financial mechanics of the deal
and had a keen and non emotional/objective view of
what was required. He then had an exceptionally detail
oriented Integration Manager that managed the central
control tower for all activities. He had a tremendously
well organized data warehousing system and
comprehensive master plan with checklist, documents
and spreadsheets where every detail required was tracked
and controlled. There was a handpicked set of strong
integration team leaders, which he led. There was then a
team assigned to every function. The team dynamics and
performance was engaging, collaborative and
exceptionally hard working. There were significant
levels of authority given to enable quick decisions and
forward progress. They were also handsomely
compensated and rewarded for all their efforts.
5. Insulation of non affected businesses.
Due to the earlier re-organization of Flextronics there
were large segments or divisions that essentially were
not impacted by any of the integration activity. This was
of tremendous importance and reassurance as well as
validation that the segmentation strategy worked. We
were in fact able to keep over 40+ % of the revenue of
company actually functioning as normal. Many times
when there is an acquisition of companies of similar size
and scale, it can paralyze or partially stall the operational
activities of both entities. It can often give the
competition the window to take advantage of market
opportunities during the time of significant internal
distraction. This never occurred with this acquisition and
an additional part of the reason is the manner in which
we effectively managed our communications with the
Customer base.
6. Integration Process and Change
management combined.
Listed above in Fig 1.0 and Fig 2.0 are models of the
change process and an integration process. The majority
of the integration team were never involved in an
integration of this magnitude before. We conducted as
much research and learned as much as was possible in a
short period of time. We began to learn about the
importance of a strict timeline and that during the time
between the announcement and the actual deal close is
where most of the seeds of success are sown.
Everyone got familiar with the concept of Day One or
Go Live deliverables. i.e. what was critical to be in place
on day one when Solectron employees officially became
Flextronics employees. There was a massive level of
information shared during this period. This required
significant levels of trust as there was competitive
information that was very sensitive and needed to be
protected and released in stages as regulatory approval
hurdles were crossed. As each approval milestone was
hit, more and more information was shared and
exchanged. People also got familiar with the 1st
90 to 100
day plan and the tie in of all their activities to the
achievement of the synergy goals which were ALL hit.
The fact that the synergy goals were hit was a
remarkable achievement given the scale and complexity
of the acquisition and much credit needs to be given to
the initial accurate financial assessment.
The Integration process was then essentially integrated
with the change management process which meant that
the whole change was also viewed NOT purely through
the lens of achieving financial synergies, but also
through the lens of enabling people to cope with and deal
with this change.

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© Patrick Hehir BVG Intl LLC An M&A Case Study
7. Incentives, motivations and key
leadership ‘On-Boarding Program’
The people that were key to ensuring the integration
went well, fit into a number of groups. 1. Those that
would be remaining employed. 2. Those that would be
leaving, but that were needed in the interim to ensure
success. 3. Those that were co-opted temporarily from
their existing day jobs to work on the integration. 4.
Lastly, as in all acquisitions there was the group that
were destined to be excess to requirements.
Significant resources were allocated for the management
of each of these groups and there was a big effort to
ensure that all were treated with dignity and respect.
Much effort and thought went into the most effective
way to ensure appropriate motivation for all people.
Incentives were put in place to ensure appropriate
retention for those that were needed in an interim basis
as well as those directly involved in the integration
process. Additionally there was a moratorium of sorts put
in place for people staying as they were guaranteed to
receive their same salaries and benefits while a longer
and more robust and transparent process was developed
for converting people over to the same salary and
benefits grading system . Overwhelmingly people
watched and saw Flextronics trying to do the right thing
and not mess with arguably the most sensitive element
for any employee (after employment) i.e. salary and
benefits.
Additionally one of the MOST important events that was
developed was a senior leadership on-boarding event.
We organized an offsite location and brought in
approximately 50+ of the top global and most influential
leaders of Solectron that were remaining in leadership
positions around the world. We designed a trade show
style of event, where groups of 8 people would cycle
through a booth or set of presentations from the key
central functions of the company such as Finance, HR,
Legal, Materials e.t.c We strived to maximize
interaction and learning as well as prevent death by
PowerPoint. We wanted to convene and have dialogue as
opposed to talking AT people. We then followed this up
by a social session where people got to mingle, have a
few beers and get to know each other in an informal
setting. Each attendee also received a packet of materials
that provided a detailed outline of how each function was
organized and what their key operating principles and
non-negotiables were.
Each leader was then asked to go back to their
organization with a communications plan and share the
information that they had learned with their employees.
Then directly afterwards, a team of two Executives
visited each new site and delivered a synopsized
presentation to significant population groups (mostly non
direct labor employees). We explained the Flextronics
Vision and Culture and had an open forum for questions.
It too was warmly received by all sites as it was one of
the first times that site staff had met and engaged with
Snr Execs from Flextronics and it seemed to ease
tensions A LOT.
On subsequent surveys and feedback sessions, the on
boarding sessions proved to be viewed as one of THE
most valuable to the new leaders and this meeting was
conducted within the first weeks after the close so there
was minimal time for anxiety and uncertainty.
8. Synchronous communication to all
stakeholders e.g. Customers, Suppliers
As mentioned earlier, the communications plan within
the combined companies was tremendously important.
But just as important were the other external
stakeholders and clearly the Customers were of
paramount importance as we were anxious to be able to
assuage any of their nervousness or insecurity. So
extremely early on, just after the announcement, the exec
team went to work to outline what were the likely events
that would occur in terms of differing sites and divisions.
We anticipated the questions and concerns of all of our
Customers and had a plan developed and ready to be
rolled out once the deal closed. Personal phones calls and
meetings were set up to gauge the feel for any concerns
that existed. The very day the deal closed, a highly co-
ordinated blitz began where Flex leaders spoke

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© Patrick Hehir BVG Intl LLC An M&A Case Study
DIRECTLY with the Customers and shared committed
plans as to what was occurring and what it meant to the
customers involved. Many of our Customers were
extremely impressed with the level of thought that was
given to the strategy which minimized their concerns and
fears. In fact many were excited and had a lot of hopeful
anticipation. It turned out to be a very positive activity. It
resulted in minimal customer interruption and almost no
preventable attrition. There was a similar effort in terms
of the communications with the supply base as there was
always going to be the worry of some supplier
consolidation taking place and we needed to ensure
continuity of supply.
9. Keeping what works and SENSIBLY
leveraging the best of both. (knowing
what to change).
While I mentioned earlier that we never brought
uncertainty into the ranks of the Executive leadership of
Flextronics by the threat of merging and finding the most
competent Executive from either side, we did however
clinically assess where the best sites and capabilities
were. It turned out that the level of Customer overlap
was exceptionally low and that there was a natural
expansive market segment fit between both companies.
So this led to not as much consolidation as might have
otherwise happened. Flextronics was generally viewed to
be supporting the higher volume lower complexity,
vertically integrated and lower complexity customers.
Solectron were serving the needs of higher end medium
volume and complex customers. Soon after the
announcement a small team visited each Solectron site to
make strategic assessments of their competencies and
capabilities and a master footprint map was created in
conjunction with the Flextronics global map. There were
also strategic assessments of some of the systems, tools
and processes that Solectron used VS those at
Flextronics and many best practices from Solectron were
adopted en-masse around the company. Best case in
point was Solectron’s business excellence organization.
In fact in some cases Flextronics manufacturing sites
were closed or consolidated into Solectron’s site if it was
deemed to provide the best and most effective or
strongest market offering to Flextronics customers.
These actions were generally viewed favorably by all
stakeholders. It was seen particularly by Solectron
employees that the strategic decisions were thoughtful,
understandable and to the most part, sensible and
intelligent.
10. Post integration Leadership Meeting
One of the final events that proved to be of great value
was a large Leadership conference for approximately 250
of the top leaders in the company and it was the first time
that both the leadership of Flextronics and the by then
nonexistent Solectron, convened. We had embarked on a
leadership conference program every 6 months during
the transformational change of Flextronics from 2006
onwards and this acquisition provided a pinnacle
moment where Flex had come from revenue of $14B to a
run rate of approximately $35B. These events always had
interactive working sessions where we leveraged on the
competence and ideas of the attendees and this event was
no exception. One key agenda item specific to this
meeting was a conversation on the cycle of change and
the importance of mourning, paying respect and then of
letting go. We essentially tried to architect a unifying
event and set a course of new direction where we were
all finally on the one boat with a clear direction charted.

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© Patrick Hehir BVG Intl LLC An M&A Case Study
Who We are:
Business Value Group are specialists in organizational change and restructuring. We believe that effective
change needs both a business mindset and a people mindset. In many respects it is often the soft stuff that ends
up being the most difficult. This is particularly true where there are big Ego’s involved who believe that they
have all the answers and are unwilling to listen. Our team profile is listed on our web site www.bvgintl.com
What we do!
Integration Management Support:
We never take over the implementation of an integration project. However what we do is to enable those that
are chartered with the responsibilities, to be more prepared and more confident by following established well
proven methodologies and processes. We specifically help in areas such as the following:
 Business and Organizational Assessment.
Including global divisions and sites.
 Organizational and Executive competency
assessment.
 Cultural Analysis of company, divisions, sites
and functions to anticipate and prevent
problems.
 Executive Coaching and Support
 Master Plan development including the
leveraging of a proven Integration process
 Setting up of Integration teams and PMO
(Project Management Office) equivalent.
 Ongoing risk assessment and reporting
preparation to stakeholders such as Board and
Public community.
 Comprehensive access to detailed M&A
integration checklist for all typical functions IT,
Finance, HR, Operations e.t.c.
 Synergy tracking and reporting development
and ongoing assessment.
 Master change management program
development and management.
 Teams and overall organizational effectiveness
(objective assessments and advice plus
interventions as appropriate as teams emerge
and work together). i.e. manage breakdowns.
 Development of communications and
messaging plan for all stakeholders e.g.
Customers, employees, suppliers e.t.c.
 Organizational Re-Purpose and Vision
development for newly combined entity.
 Design and development of integration packets
to support accelerated integration.
 Design and development of Leadership on-
boarding process and events.
For Further Information:
If you would like further information on the lessons learned or need support on your next big
acquisition, please feel free to contact us via the information below.
Patrick J Hehir MBA, MSOD
President
Business Value Group Intl LLC
BVG Intl LLC
Saratoga CA 95070
+1-408-904-8195
www.bvgintl.com patrickhehir@bvgintl.com