Mergers, Acquisitions, DivestituresThe Good, The Bad, The Ugly

Linda E Long

ARMA Atlanta

11/19/19

DisclaimerEvery deal is a little bit different

Your role might be different

What are the scenarios

Mergers – The Marriage

Acquisitions – Arranged

Marriage

Divestitures – The Divorce

The Agreement

Section of interest to RIM:

“Access to Information” &/or

“Record Retention”

Be sure to ask for section(s) from Legal

Outlines how long to keep records, what records, etc.

May need to add to Legal Hold – Memories are short

Establish relationship with the “deal”

attorney

The Agreement

Get involved so you know what will be

expected – site visit, etc.

Asset Purchases or Sales apply to only a part of the

business

What part of business / records are impacted

There is a Budget

You may need to transfer / receive / convert

during/after close

Due Diligence Phase –Before

the close

Commences when letter of intent

(LOI) signed

Buyers

Confirm info about Seller - contracts,

finances, customers, employees,

payroll…

Enables an informed decision

Due Diligence Phase –Before

the close

In general, records not involved

Acquirers may request RIM to

provide info if

Weaknesses in acquirer’s program

Expansion of RIM

Types of Questions

Do you have a retention schedule?

How many people on the staff?

How many boxes do you have?

Where are boxes stored –

vendor(s)/inhouse?

What are your credentials?

Due Diligence Phase –Before

the close

Retention

Record Series = Due Diligence

Record Description = Includes

materials related to mergers,

acquisitions, or divestitures –

financial reports, studies, etc.

Retention = 6 years after expiration

(close) or per non-disclosure

agreement

Note: Non-consummated deals may be

shorter

You are either a Buyer or a Seller

Sellers

Formal transfer of electronic data

FTP site – File Transfer Protocol – Engineering

drawings, payroll, etc.

Transferring boxes/files to new

owner

Complicated & Messy - Shared Services & poor

recordkeeping

Co-mingled company data

Buyer does not want everything – Get legal advice

Anything that has met retention, but not destroyed

Information on former companies

Provide transfer summary & B/F inventory

Legal approves - Agreement outlines who assumes liabilities

Send to Buyer for approval

SellerTransfer List

Sellers

TSA – Transition Services Agreement

Perform services for new buyer for X months -

Billing, Accounting…

Agreement requirement to keep

records for X years

Buyers

Data received in incompatible formats -

box / file inventory, payroll,

accounting….

Map / migrate / convert to your systems

Database lost in M&A –only have spreadsheet

Loss of knowledgeable staff

Elaborate filing system - No one to retrieve

Buyers

Close operations

New boxes/files to manage

Boxes with no description / owners

Box/file data needs to be migrated to new system

Backlog of records that have met retention

New Legal Holds - No one can explain

Share drive

After Close - Mergers & Acquisitions RIM Activities

Mapping Retention Schedule

Offsite Storage

Email Retention

Document Management Systems

After Close RIM Activities - M&A

After Close - Mergers & Acquisitions RIM ActivitiesMapping Retention Schedule

Acquirer may not want / know how to do it – you

have to

If Record Manager is doing it, it may take a while -

Up to 3 years

Issues

May need to understand the business

Retention periods don’t match your retention

Different terminology for same record / Redundancy

Volume

Different philosophies on how to do a Retention Schedule

Give them every record they want

Have a big bucket (never seen it)

Holes in retention schedule

By business function, by record owner

After Close RIM Activities - M&A

After Close - Mergers & Acquisitions RIM ActivitiesOffsite Storage

Inhouse Record Centers

Your core business may not be record storage – move to

vendor

Vendor

Merge into one

Use more than one

Issues

Unindexed boxes

Inexplicable descriptions

Departments don’t exist anymore

Mapping to new department numbers and names

Owner may not want to transfer – get Legal

involved

After Close RIM Activities - M&A

After Close - Mergers & Acquisitions RIM ActivitiesEmail Retention – Different

philosophies

Document Management System –

Different software

M&A Date – Document somewhere

Rename dept - “XYZ Sold 12/2010”

Make it a Legal Hold

You won’t remember otherwise

After Close RIM Activities - M&A

After Close RIM Activities -

Divestitures

Transfer to new owner

Boxes/files data & inventory

Document management data

How to do efficiently

If not transferred, ensure Dept

Name =

“XYZ SOLD 05/2018”

Follow agreement time periods

The Good

New opportunities

New responsibilities

Growth

Better Benefits

The Bad

Change

Culture

Sense of loss

Distance from new Mother

Ship

May eliminate your old job

and offer you a different job

The Ugly

Lead Parachute vs Golden

Parachute

Best side to be on – the

acquiring side

Mostly it is not a merger

unless acquirer feels like

they need expertise in your

area

What can you do

Be open to change – the past is the past

and the future is the future

Volunteer for any and everything

Map retention schedule

Lead effort to move record center offsite

Assist the new records manager in developing Big

Buckets

Do a presentation about your program

If asked, give your advice on email retention

Be open

What can you do

Assess the situation

Culture, Opportunities, Like the people

Beneficial to stay

Beneficial to leave

Questions