A Presentation by: Darryl Judd l Global Chief Operating Officer

MERGERS & ACQUISITIONS Leading Through Transitions Perspectives on the people side of M&A

“Brambles acquires Ferguson Group for £320m”

“STEF acquires Speksnijder Transport in

the Netherlands”

“Eurotranspharma acquires CIBLEX

express network”

“UPS Acquires Cross-Border e-Commerce Enabler i-parcel”

“Suttons Group acquires Imperial Tankers”

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Source: PWC Intersections August 2014

The pace of transportation and logistics M&A Transactions accelerated during the Q2 2014

However, 2014 is not expected to set records for mergers and acquisitions in the sector. •  Shipping and trucking modes were more

active this past quarter.

•  The level of financial investment in the T&L industry has been more robust since 2012.

•  Acquirers in the T&L industry remain focused on local-market deals.

•  Emerging market acquirers in particular are consolidating their local markets, driven by relative fragmentation and higher return possibilities.

31

Number of Deals

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0 300 600 900 1200 1500 1800

2012

2013

Q1 2014

Shipping Trucking & Other Logistics Asia Pacific Total Source: PWC Intersections August 2014

Average deal size in Asia remain high as emerging Market Acquirers consolidate their local markets

Deal multiples for T&L are reaching record highs, a trend since the GFC. The general increase in equity market valuations has contributed to higher deal valuations along with infrastructure deals, which tend to carry above-average multiples.

0 10 20 30 40 50 60 70 80 90 100

2012

2013

Q1 2014

Africa + Undisclosed Americas UK + Eurozone Asia + Oceania Total

Average Deal Size (Millions of Dollars)

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Source: PWC Intersections August 2014

Deals don't always achieve buyer's strategic goals.

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What do we think are top 3 integration pitfalls in a merger environment?

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Two-thirds few companies are not getting basics right

McKinsey found; •  They don’t plan and execute a thoughtful, end-to-end

integration process.

•  They don’t put the right leadership in place.

•  They don’t hone the skills needed to realize fully even the most obvious value from the merger.

Success requires: •  Deeper, stronger integration skills and intense management

commitment.

•  An integration approach that’s flexible enough to allow leadership to pursue sources of transformational and combinational value.

•  Rigorous analysis and integration management.

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Source: McKinsey 2013

People integration could not be more important or complicated

Few deal makers successfully meet their most important financial and operating goals.

•  An acquisition is about intellectual capital; hearts, not just minds, are important.

•  You must make a conscious effort to bring new joiners along.

•  The culture we create is as important as the financial elements in making a deal successful

Percentage reporting a “very favorable” deal result (In Percentage)

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Source: PWC Intersections August 2014

Source: PWC M&A Integration Survey 0 5 10 15 20 25 30 35 40

Profitability

Cash Flow

Leadership Alignment

Employees clear understanding of the Company Direction

Quality Focus

Customer Service

Employee Retention

Employee Morale

Speed of Decision Making

Productivity

Speed to market

2012

2013

The heart of the matter

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The people aspects of a deal is now viewed as strategically vital to its success yet most integration plans do not incorporate the people component up-front.

Where’s HR? There is greater need to position Human Resources as a strategic due diligence partner

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“ Oversimplifying people-related risks can lead to inaccurate integration planning, poor synergy predictions, unexpected

costs, and loss of critical talent ”

Candidates for members of the HR M&A team should possess the following behaviors and capabilities:

Proactive

Collaborative team player

Analytical and detail oriented

Ability to work in an ambiguous environment

Ability to work under pressure of time constraints,

conflicting priorities, and agendas

Broad knowledge of HR

Strong communication skills

Candidates should have prior experiences that prepare them for M&A activity. Some examples include:

Leader of a functional area that is impacted by M&A

activity

Project manager for an enterprise-wide strategic

initiative

Owner of P&L or budget

Member of an international and cross-functional project

team

Employee of an acquired or spun-off organization

Taking the lead during a merger

How leaders choose to communicate during a merger is key to realizing the value of the deal

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Source: Deloitte / Logistics Executive Group

By improving how you plan and execute M&A integration activities you significantly increase the chances of achieving your desired results.

Stacking the deck to ensure success

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Conduct “truth testing” vertical workshops focused on maximizing value events.

1

Analyze people, processes and technology critical to each value event.

3

Review transaction strategy and identify

operational priorities.

5

Identify and prioritize Day One business critical

events = value events. 4

Mobilize Integration planning around value

events. 2

Source: Deloitte / Logistics Executive Group

1

There’s a new boss in town. Is

that good news or bad?

2 The most

insightful cultural observers often are outsiders,

because cultural givens are not

implicit to them.

4

The art and science of executive

selection does not happen by chance

5

Prepare your leadership team to navigate the transition to a

new organization

3

The starting shot for a merger can

also be the starting shot for

an HR transformation.

Five key things that make all the difference

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Source: Deloitte / Logistics Executive Group

Be prepared for Merger Aftershocks

Surviving the people challenges of a post-merger integration. Six critical actions to help you stabilize your organization after a merger announcement: •  Leadership alignment •  Organizational design •  Talent retention •  Communication •  Cultural Alignment •  Day One

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Source: Deloitte / Logistics Executive Group

“ These six actions

might seem straightforward, but

in the frenzy of activity that usually

follows a merger announcement, even simple things can be difficult to remember

and execute ”

Melbourne ! Sydney ! Brisbane ! Singapore ! Hong Kong ! Shanghai Mumbai ! Delhi ! Chennai ! Dubai ! Ireland ! London

Logistics Executive Group Suite 32,3 Church Street #25-00 Samsung Hub Singapore 049483 Darryl Judd l Global Chief Operating Officer DarrylJ@LogisticsExecutive.com www.LogisticsExecutive.com Logistics Executive has studied workplace behavior and team dynamics in the Supply Chain and Logistics industry cross-culturally. For 15 years we have assisted multinational companies to develop people strategies, led talent attraction programs, defined and implemented business processes and provided expert consulting that has impacted organizations with positive business outcomes.