Acquiring the Acquired

Apria- New vision

MERGING
The combining of two or more companies, generally by offering the
stockholders of one company securities in the acquiring company in
exchange for the surrender of their stock. A merger happens when
two companies are combined and the resulting company takes the
form of the company who bought the other company. it is a good
investment and they will earn a positive return on the investment.
The goal of any business in a capitalist society is to maximize
shareholder wealth and buying a company that helps accomplish
that goal is seen as a good thing.
This is the broad financial definition of why companies merge. In
the real world, there are actually many reasons that companies
merge. Unfortunately, not all mergers lead to maximization of
shareholder wealth.

PRE - MERGER
PLAYHOUSE 02
It is huge home-health care organization headquartered in southern
California and has been a fierce competitor to many outgrowing
organisations. It has a quite a strong market position. It emphasised
on a formalised organisational structure and has centralised
decision making. It focuses on serious working conditions, in and
around the workplace.

TRISCO HEALTHCARE CENTER

TriscoHealth care centre is also a big home-health care organization
and is headquartered in southern California. This organisation has a
reputation with is spread country wide and offers great environment
for working for employees as well as for the former customers. It
has a fierce competition among its competitors because of its high
quality of services. It focuses on informal organisational structure
and has a decentralised decision making process wherein the
managers have significant authority.

Post merger
Playouse 02and TriscoHealthcare group decided that rather than
continuing to compete, they could strengthen their market positions
by merging to create one large firm, Apria Healthcare Group.
Together, they planned to expand their home health services
nationwide as the effects of managed care spread.

APRIA
Three years later the Stock value of Apria has declined by 25
percent, and earnings fell. How far Apria declined was soon evident;
when efforts began to find another company to take over the firm,
few buyers were interested. What happened was primarily due to
operational problems caused by the merger. Those issues had not
been resolved because of internal conflict between ex-Playhouse
and Trisco Healthcare executives and employees. Ultimately, the
Board of Directors, which was evenly split, accepted the need to
remove Timothy Aitken, former CEO of Trisco Healthcare, and have
Teremy Jones from Playhouse as CEO.
It was obvious from the beginning that the organizational cultures
were very different.

 Where Playhouse had a more formalized structure with more

centralized decision making, Trisco Healthcare had very
decentralized decision making and branch managers had
significant authority.
Also, merging computer and billing systems by using the
TriscoHealthcare system meant that employees from
Playhouse had to be trained, which did not happen fast
enough. As a result, numerous billing errors and the resulting
complaints and phone calls from unhappy customers
overwhelmed Apria customer service departments.
To save costs and eliminate duplication of Jobs, about 14
percent of the employees in the combined company lost jobs.
But the greatest numbers of those cut were former
Triscoemployees. For those remaining, it appeared that most
Playhouse managers were not affected as much as the Trisco
Healthcare managers. For instance, only 6 of 21 regional
managers were formerly with Trisco Healthcare, which caused
most of the best performing Trisco sales representatives to
quit.

Even changing some basic HR policies caused problems. For

example, when Playouse HR policies were extended into Trisco
offices, a new dress code and time recording procedures
irritated many former Trisco workers. A significant number of
them left in the first year. The level of conflict was so severe
that employees from one firm referred to those from the other
company as idiots and refused to return phone calls from
employees with the other firm.

Finally both Aitken and Jones left the firm, and a new
executive team has been struggling to rebuild Apria. Instead
of being a healthy merger, it turned into the merger from
hell.

Strategies to uphold APRIA:

1. Accurate Business Valuation calculating the true worth of

your own company or one you want to acquire is easier said
than done. It also has a lot to do with supply and demand. They
say that if you are thirsty you will pay an exorbitant amount for
water. Perhaps thats the right analogy for Microsoft. They
recently paid $240 million for a 1.6% stake in Facebook.
Microsoft valued the then three-year old company at over $15
billion! That is a high valuation by any method. But that
purchase stopped arch-competitor Google from getting its foot
in the door. And perhaps that was the most important reason for
the purchase.
2. Due Diligence Process
Due diligence is one of the classic business processes that are
part of a merger or acquisition. It involves representatives from
both sides of the deal examining the financial records of the
other party. Traditionally, this is done in a data room filled with
financial records and a group of analysts poring over them.
Knowing what to look for and how to find it in the records is the
key to an effective due diligence.

3. Integrating the new organization: The Key to a

Successful Merger
Merging two organizations involves managing a whole series of
changes to align the new organization to the new strategy and
vision. And this process involves people and their careers. When
people in two countries and two cultures are involved, there is
another level of complexity to deal with.
Things can go wrong when dealing with this human element. It
starts with the CEO and moves down to managers and line workers.
Executives from both companies may compete for positions in the
new organization. All of this can create tensions in the work

environment. And that can make it difficult to keep things moving in

the right direction.

4. Cooperation
Both the companies which are to be merged need to cooperate with
each other regarding the different rules and regulations carried out
in their own separate ways and need to come to a conclusion onto
which rules and ideas are to be prevailed for better understanding
and quicker decision making. If both the companies emphasise on
working according to their regulation, then a veto power including
all the board of directors need to be taken, causing no further
ruckus.

5. Ethical working conditions

The employees need to put aside their egos and personal
issues whatsoever when working through a merger. They need
to understand the importance of laws and ethical working in an
organisation. Serious measures should be taken if the above is
noted to be violated by any party. Specified ethics and norms
need to be followed when working through the same.
6. Authority of power
Special powers to be given to the higher level of management
wherein the operational level cannot make their own decisions
on any condition which can or may lead to misunderstanding or
fallout of the company. Authority of power should be clearly
mentioned at the time of merger or should be at least agreed
upon.

Why me?

Apria , which has already faced a huge challenge in the

last few years, at least now needs a steady life and a
market to grow and emerge which can be done under
right human resource development as problem lied in
the way the employees behaved, reacted and finally the
company was at the stake of getting dissolved.
Being an HR manager in this merger from the very
beginning gives me an advantage to skip the next
upcoming fallouts and can focus on the current mishaps
and help learn and develop from it. Recruiting a new HR
manager will not only make it difficult for him to
understand the existing situation prevailing in the
company as well as might result in further problems for
Apria. Working in the same company for so long gives
me a prioritised position than other newcomers. This
company is not in a situation to face any changes
anymore, rather requires a manager who not only
understands the organisational as well as the working
conditions but also is well aware of the past experience
which leaves me at an advantaged positions.