HR Case Study 15
STHRM, Inc., Works with Texas-Based Private Equity Firm to Perform Due Diligence for Potential Acquisition
Providing service to clients since 1993, Shared Time Human Resources Management, Inc. is a value-oriented source for Human Resources solutions. Our private consulting and custom-designed systems present a high-value, low-cost solution to fixed-cost human capital issues. Our staff has more than twenty-five years of corporate human resources experience with “Fortune” listed, “Inc. 500,” and privately owned businesses. The following STHRM, Inc. case study exemplifies the type of opportunities and challenges we undertake and the sound, value-added solutions we provide.
A Texas-based private equity fund needed comprehensive and time-sensitive HR due diligence to support their proposed acquisition of Newco, a non-union company with employees in two southeastern states.
The private equity fund hired STHRM, Inc. to conduct a thorough HR due diligence review of Newco, with a particular focus on analyzing the company's compensation practices and employee benefits plans, with the goal of minimizing post-acquisition risk.
Working with the private equity fund's senior acquisition team, STHRM, Inc. conducted the following in-depth review:
Newco’s management structure was top heavy.
One managerial position should be reduced.
Newco’s health and welfare and 401(k) plans were too expensive, especially given Newco’s size, and needed to be rationalized.
Source new benefit providers to reduce the cost health and welfare benefits.
Employee monthly premium cost sharing for hospitalization insurance should be increased from 0% to 20% or 30%.
A spousal surcharge should be implemented.
Newco’s President was trying to match his former employer’s base and incentive compensation levels.
Newco’ President was not interested in co-investing alongside the sponsor in the proposed transaction.
The private equity fund called “pencils down” and walked away from the planned from the acquisition.
Notice: In order to maintain strict client confidentiality, business-specific information has been removed from this case study. The presented situations, activities, programs, projects, actions, and subsequent results are accurate.
If you are interested in learning more about this case study, results and services offered by STHRM, Inc. please contact, Glenn Levar (telephone: 440-979-1046, e-mail: firstname.lastname@example.org). To learn more about STHRM, Inc. visit www.sthrm.com.
STHRM, Inc. has teams and strategic alliances with executive wealth management experts, health and life insurance brokers, 401(k) providers, interim executives, professional advisers, operations professionals, third-party workers’ compensation administrators, and employment/contract attorneys.
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