Insight # 47 : Make Success Happen

It's Complicated: Succeeding in a Global Acquisition

by Carl Dalby

In June 2012 Vancouver-based PEER 1 Hosting announced that it was acquiring NetBenefit (UK), a UK-based managed hosting company with operations in the United Kingdom and France. The purchase of this Group NBT division thrust PEER 1 Hosting into the number two position for small and medium managed hosting services in the UK. PEER 1 Hosting's portfolio includes managed hosting, colocation, and dedicated servers under the ServerBeach brand, and cloud services through Zunicore. But this purchase was different from any other deal the company had ever done in its 18-year history.

In this interview Ted Smith, Vice President of Operations for PEER 1, offers a frank assessment of the mistakes made with the acquisition and explains how he and his team were able to turn the initiative around with guidance from Pcubed.


Pcubed: Ted, first of all, can you describe PEER 1 Hosting's business rationale for the recent acquisition of Group NBT hosting business and also the expected benefits?

Ted Smith: First and foremost, the acquisition cemented us as the number two hosting provider in the UK market. It allowed us to leverage our technology and our people in the UK, whom we've invested in the last three years. It enhanced our scale within the UK, doubling our team, doubling the number of data centers, and doubling our revenue. And it allowed us to test new markets in France. So we get a chance to test new products and services and hopefully new opportunities.

What did you perceive to be your initial challenges and risks for the acquisition, and also how did you look to address any concerns that you or your management team may have had?

I've been involved in a few acquisitions in my career. Honestly, I underestimated the complexity and challenges associated with this particular integration. We didn't have dedicated resources from the business units. They didn't have the time to build a solid plan by themselves. We lacked some technical knowledge on the HR and legal front, particularly with UK and French labor and HR law. And we also didn't have enough dedicated people in the project.

Why did you decide to use Pcubed, and what were your initial impressions?

We had been doing some search for project management. Pcubed was recommended to us by GNBT, the seller of the business we purchased. At first, I was pretty skeptical because I was worried about having someone work both sides of the project from GNBT and from our side. I sat down with [Pcubed Managing Consultant] Karl Williams, and spent some time with him, talking through some of my challenges and concerns, and was really impressed by the way he addressed them and how honest and transparent he was about how they would deal with those issues.

What did you feel were the challenges at the time and how were things tackled by working with Pcubed?

It was really two steps. I thought initially we just needed a project manager to come on board to help, to get me out of the weeds. I was really wrong in that. Shortly after, even with Amar [Mann] starting, we were still bogged down with challenges and issues and daily having problems with the project. Amar tried to talk to me about it. I didn't want to listen. Karl came in and said he'd bring in a second resource, Paul Tyrrell, to help with documenting where we were in the process and project. Paul spent a couple of weeks working with Amar, came back with a presentation to me that detailed really how far behind we were, the challenges we had, and the problems we faced if we continued.

I was shocked by that presentation and decided to take their advice. We added a few more resources in the project and really turned the project around.

What are the key achievements you can attribute to Pcubed in terms of contributing to the program's success and delivery? And also what business benefits have been realized to date?

Honestly, they saved the project. They saved me from the activities I was dealing with. They turned a project that was getting done but not well to a very planned set of activities and we've met all of our objectives to date, and we're actually ahead of schedule on completing the project. We were almost done with the overall project, and it's really thanks to the Pcubed team for helping.

What insight would you provide in the challenge of managing a global integration program with teams in different regions and time zones?

I think the most important thing is to get the project managers as close to the work stream teams as possible. Having them work remotely isn't very effective. Once the project managers and work stream leads have a good handle on the project and a good set of tasks, the project managers can then work together globally to bring together a full plan.

Based on your experience to date, what lessons learned would you be able to share in terms of how to manage a complex business integration program?

Dedicate resources. If you don't have business people that you can dedicate, supplement with contractors and project managers. Also, the values of the people that you're bringing on board and the match with your own team are important. If you wouldn't hire them full time, don't hire them as contractors.

What do you see as the strengths of Pcubed and what have you found most valuable?

Really, four things. The first, very flexible. They spend the time to do the job that needs to be done when it needs to be done, on my schedule.

Very smart. Each resource brought to us has been a subject matter expert and added value to the project.

Very professional. They do what they say they're going to do.

And straightforward and honest. They tell you the straight goods. And if it's something that may not work, they’ll give you options and alternatives and just be totally upfront with you.

Finally, how would you describe the style and culture of Pcubed, and how does this differ from other consultancies you have experience with?

I think as you build partnerships it's important to build partnerships with companies that have cultures similar to your own. And Pcubed demonstrated that to me throughout this process.

We have two values at PEER 1 that are very important to us. One is, strive for excellence. And Pcubed demonstrates that on a daily basis with me and the team. The second is, enable others to succeed. When Pcubed saw I was failing, they spent their own time and resources to make sure I was given the information needed to succeed, and I really value that.

For further information on this article and Pcubed please contact info@pcubed.com.