SUCCESSFUL CULTURE DEVELOPMENT & INTEGRATION IN AN ACTIVE M&A ENVIRONMENT
Moderator: Brett Haugh Principal & Executive VP, Ascende
Marty Kunz VP Human Resources, C&J Energy
Roger Mosby VP Human Resources, Kinder Morgan
Laura Ramey VP Human Resources, Crestwood Midstream
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TALENT MANAGEMENT, DEVELOPMENT & ACQUISITION STRATEGIES IN ENERGY SUMMIT
GENERAL SESSION
C&J Energy Services Presenter: Marty J. Kunz, SPHR
Vice President-Human Resources Workforce Next Summit
Omni Hotel- Houston Westside September 30, 2014
C&J Overview
C&J Energy Services is an independent provider of premium hydraulic fracturing, coiled tubing, wireline and other
complementary services with a focus on complex, technically-demanding well completions. We provide our services in
conjunction with both conventional and unconventional well completions, as well as workover and stimulation operations
for existing wells.
1997
1999
2002
2007
2011
2012
2013
2014
Josh Comstock Founded C&J in Robstown, TX
Introduced Stand Alone Pumping
Services
Introduced Coiled Tubing Services Robstown, TX
Introduced Fracturing Services:
Robstown, TX
Initial Public Offering on NYSE;
Acquired Total Equipment Services;
Corporate Office moved to Houston
Introduced Wireline With Acquisition of
Casedhole Solutions
Opening of new Corporate office and
New R&T Center; Acquired Tiger
Casedhole; Acquisition of Nabors NCPS
Acquired Tellus
Areas of Operation
We are geographically focused where there is the most opportunity, with service centers near the majority of prominent domestic shale basins.
Research and Technology
• Downhole Tools Perforating Coiled Tubing
• Wireline Tools
Grand Opening Spring 2014 of new 95,000 sq. ft. Engineering & Manufacturing Facility
• Surface Equipment Fracturing Coiled Tubing Wireline Pressure Pumping
• Fracturing Chemistry
The C&J Family
Our top-tier manufacturer of hydraulic fracturing, coiled tubing, pressure pumping and other equipment used in the energy services industry.
Our global supplier of oilfield chemicals and technology. They supply, engineer, manufacture and apply specialty chemicals.
Tellus delivers innovative Directional Drilling, MWD and LWD products and technologies to the oil and gas industry through contract engineering and in-house developments.
Oil & Gas Awards
2012 Gulf Coast Oil & Gas Awards, Winner Drilling & Well Services Company of the Year 2013 MidCon Oil & Gas Awards, Winner Well Completion Company of the Year 2013 Gulf Coast Oil & Gas Awards, Winner The Preferred Technology Award for Excellence in Well Completion
M&A Activity at C&J • 2011- C&J acquires Total Equipment
• 2012- C&J acquires Casedhole Solutions
• 2013- C&J acquires Tellus Oilfield
• 2014- C&J acquires Tiger Casedhole
• 2014- C&J and Nabors Drilling announce C&J’s acquisition of Nabors Completion and Production Services
Total Equipment Acquisition • Was a main supplier of Coiled Tubing and Fracturing equipment for C&J
• Vertical integration of supply chain
• Approximately 150 employees
• Stand alone operation
Casedhole Solutions Acquisition • Added a new line of business
• Strong management team
• Approximately 600 employees
• Strong company culture
• “Slow burn” on integrating
• Systems • Policies • Procedures • Pay practices • Payroll
• Just “completed” in 2014
Tellus Acquisition • Very small company (less than 20 employees)
• Intellectual capital added to newly established Research & Technology group
• Tellus needed capital to implement products and ideas
• Integration effort minimal
• Owner(s) stayed with C&J
Tiger Casedhole Acquisition • Tiger also small, but STRONG culture
• Approximately 37 employees
• Owner is now manager of that division
• Strong resistance to becoming part of a “big company”
• Unlike Tellus, Tiger had a “history” and long-tenured employees
• Much softer integration approach • Lots of hand holding and reassurance • Slower burn on changes
• The magical world of “California”
Nabors and C&J • Scheduled to close in Q4-2014 or early 2015 (Fast track)
• Smaller company acquires larger one
• (3,100 employees versus 7,000- 8,000 employees)
• Complicated • Inverse acquisition
• “Mother ship” remains
• Cultures are very different
• NCPS is not their “core” business
• Must remain competitors until close
• Systems (IT, HR, Accounting) work is intense
HR’s role in M&A (and Talent Management) The use of a Cultural Assessment Staffing and the Preliminary Integration Plan Available Talent and Pre-Close Activities Post-Close Integration
HR’s role in any merger or acquisition is to partner with Business Development to evaluate the human capital part of the business deal: The associated dollar costs Cultural issues Identified risks Integration issues The talent and talent gaps Defensive Talent Management The 90 Day Pre-Close Plan Integration Post-Close
Team lead – Usually an experienced generalist Benefits Compensation Talent Management HRIS Payroll Employment attorney External consultants, which could include: ◦ Older worker analysis (generally a law firm) ◦ ERISA benefit plans specialists ◦ Organized Labor specialist ◦ Outplacement
Work with HR Team Lead to apply cultural assessments & recommend integration strategies
Identify Key Talent in the acquired company Defensive Talent Management Manage the Available Talent List Manage Outplacement: ◦ Manage Outplacement Vendor ◦ Internal and external job fairs ◦ Manage Transitional talent and other temporary talent
needs Manage the severance process Onboarding
A Cultural Similarities Assessment is useful in determining the “fit” between the companies and the direction of integration plans. Areas of assessment might include: ◦ Compensation ◦ Performance Management ◦ Benefits ◦ Company Perks ◦ Communications ◦ Work-Life Balance ◦ Ethics & Rules of Conduct ◦ Organizational Structure
It is never too early to work on Integration!
Routinely look at positions and people in both companies for the best to move the new organization forward
Identify Key Talent in both companies and make an expression of interest
Utilize Key Talent to develop the post close organization and which employees will fill RFT positions in the go-forward organization
Select Transitional Employees Identify employees to receive severance Develop Available Talent List (Transitional and
Severed employees) Develop the OWBPA list
The Available Talent List consists of those employees that will be terminated at close or at the end of their transitional assignment. If a large layoff is anticipated, consider allowing
employees to self select layoff Once the AT list is developed, communicate in
order to place internally Use the AT list for internal and external job fairs For those that are not placed, the Available
Talent List becomes the working outplacement list
Talent Management supports the process that determines the number and business reasons to keep surplus employees beyond the close and attempt to place within the Company
Develop incentive packages for Transitional Employees that cannot be placed: ◦ Preserve any severance rights ◦ Completion Bonuses ◦ Determine now the conditions under which a
Transitional Employee could have early release ◦ Use the offer letter process to document the Transitional
offer and the employee’s acceptance of the conditions
Outplacement – Will you use Internal or External resources, or a combination? ◦ If external, one vendor or two? ◦ All together or separate executive from others?
Continue to manage Transitional Talent ◦ Transitional Talent may be needed to wind down a
project but should be evaluated for future placement until they are actually severed
Phased Exits – If the companies agree, phased Exits (terminations) before close prevents masses of people walking out at the same time
Start the Severance Process
Close out the severance process Continue outplacement Manage the Available Talent List with the
remaining Transitional Employees Utilize the On-Boarding process for integrating
those being merged into the dominant culture Reinforce good management practices via
training: ◦ CBTs ◦ Short training sessions that overview a manager’s role in
performance management, payroll/timekeeping, etc.
Connections for America’s Energy ™ ™ ™ ™ ™ ™
Connections for America’s Energy ™
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™ Connections for America’s Energy ™
™ Connections for America’s Energy
Laura Ramey Vice President, Human Resources
Crestwood Equity Partners LP Crestwood Midstream Partners LP
“Human Resource Leadership for Mergers & Acquisitions”
Connections for America’s Energy ™ ™ ™ ™ ™ ™
Agenda
30
• Introduction
• Pre-M&A and During M&A Activities
• Post-M&A Activities
• Questions & Answers
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• General
• Bottlenecks
• Processing and Onboarding
• Preparation / Supplies
• Follow Up
Pre-M&A and During M&A Activities
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Post-M&A Activities
• Communicate, communicate, communicate • Key employees, retention, redundancies
• Compensation • Roles, responsibilities, expectations; leadership team; and,
new reporting relationships • Expectations, policies, procedures, standards and required
training • Plan an employee appreciation event (first 90 days)
Connections for America’s Energy ™ ™ ™ ™ ™ ™ Presentation Title 33
Laura Ramey Vice President, Human Resources
Crestwood Equity Partners LP Crestwood Midstream Partners LP
[email protected] 832.519.2268
Thank You
THANK YOU
B e t he f i r s t t o hea r abou t upc om ing #W F NL I V E ev en t s ! S i gn up : h t t p : / / eepu r l . c om / W D2O H
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