The Clean Team Advantage
How BCG Enhances M&A SuccessThis brochure—one of a series of eight describing BCG’s capabilities indeal transaction and integration—underscores the importance of clean
teams in M&A deal success.
Deal parties are experiencing greater pressure to maximize and expedite
value creation from each transaction, starting on Day 1. Clean teams canhelp companies meet and even exceed these expectations. But to get
the most from clean teams, companies need a thorough understandingof what they are, when they should be used, and how they must be
established and managed.
This brochure offers insights and advice vital to deploying clean teams
for M&A success—including clarifying clean teams’ key roles andresponsibilities during the pre-signing, pre-close, and close stages of
M&A deals; suggesting strategies for defining a clean team’s scope andstructure; and laying out a four-phase process for setting up and runninga clean team.

A Story of Clean TeamWork Done Right

Germany-headquartered energy companies
E.ON and RWE had headed down two different
paths, in response to big changes reshaping theirindustry. E.ON aimed to become Europe’s largest
downstream electricity provider, while fossil-fueldependent RWE was shifting toward renewable
power generation. The two companies agreed
that E.ON would acquire the grid and retailelements of RWE’s innogy subsidiary, with E.ON
transferring to RWE its renewables generation
business as well as €1.5 billion in cash.
Both companies had sales in as many as 15
different European countries. The assets
to be swapped had total revenues of €43billion, making for a massive deal. Managing
the many complexities of the deal required
finesse, creativity, and perseverance from bothcompanies over the 18 months between signingand deal close.
BCG was involved from the deal’s inception anda large share of the project’s energies went intoplanning the integration. To achieve synergies
in this enormously complex transfer, E.ON
designed every aspect of the merger in advance.
An activist Integration Management Office kept
the focus on priority sources of value.

BOSTON CONSULTING GROUPBCG provided a clean team that created fulltransparency over costs, developed a synergy
baseline, and acted as a data broker between
E.ON and innogy. To do so, the team conducted
rigorous analyses on numerous fronts. Key areas
where the BCG clean team added value to theintegration included:• Cost and FTE baselines. The clean teamharmonized E.ON’s and innogy’s cost andFTE data to enable synergy validation and
HR processes. To do so, the team facilitatedthe creation of a comprehensive activity tree
to which FTEs across the entire organizations
were allocated. The clean team also deployeddata analytics tools to manage the complexity
stemming from financial cost data derived
from more than 200 legal entities and 175
million data rows that could not be easily
handled in a single spreadsheet. The baselinesthat our clean team developed provided astrong foundation for detailing, planning, andtracking cost synergies enabled by the merger.
They also established a starting point for
HR processes and decisions affected by thetransaction, such as where personnel would
best be allocated in the new entity.

01

• Workstream requests. The integration
planning teams for the merger spanned acrossalmost 20 workstreams, organized by function,business unit, business process, or region (orsome combination). By responding to morethan 25 large specific workstream requests,
the clean team helped the teams define thefuture operating model for the new entity,
plan for synergies, and prepare for integrationand synergy delivery after Day 1. Within an
average turnaround time of less than sevendays (from data receipt to output release), theclean team structured the problem posed byeach workstream request, gathered data fromboth companies, ran commercially sensitive
analyses, and—where legally possible—
provided sanitized outputs to the workstreams.
The clean team also ensured the required legal
approvals.
• Business performance analysis. Our
clean team synthesized a comprehensive
performance comparison of the two businesses
by segment (for instance, Retail, New Solutions,and Grid) for distribution immediately postDay 1. To arrive at these insights, we collected
performance data from both companies at a

sub-segment level from the black box dataroom, harmonized data and definitions, andprepared detailed comparisons of the figures,showcasing differences and the performance
drivers behind them where possible. Thisfacilitated a swift ramp-up of the management
team and enabled immediate decision-making
around performance measures post-Day 1.
• Planning cycle preparation. Both companies
had distinct planning processes with different
individual assumptions on both sides. Our
clean team analyzed innogy’s planning figuresto understand key points of difference early on
and prepared board-level documents spellingout innogy’s mid-term plan to ensure that theleadership team was informed starting on Day
1. Our clean team then also took part in joint
onboarding meetings with representatives
from E.ON and innogy to arrive at an agreedupon process for business planning post-Day 1.
During these meetings, participants discussed
and resolved differences in their planning
processes as well as surfaced and reexamined
the assumptions informing those processes.

E.ON SE Board
Integration Council

innogy SE Board

Integration Lead

Codetermination

Integration Management Oﬃce
Planning & Steering

Synergies

Legal Implementation

Clean Team

Communications

People & Organization

Special Topics

Integration Teams• Steering & FOM• Hungary• Energy Economics• German Retail

Renew. Carve-Out

Transaction• IT/Digital

BCG supported

02 							THE CLEAN TEAM ADVANTAGE

What Is a Clean Team—and Why Use One?
Executing M&A deals and extracting maximum value fromthem—including all-important revenue and cost synergies—
has always been challenging. But that challenge has growneven more daunting.

Why? Companies have come under pressure
from increased valuations, prompting investors
to demand that they maximize and expedite value creation from a transaction starting on Day 1.
What’s more:• Regulators are scrutinizing more and moredeals for antitrust implications, requiring
careful, arm’s-length conducting of sensitive
due diligence and integration planning.
• Employees want clarity on how their work
may change, and expect stability as quickly
as possible post-close.
• Customers and vendors of all deal parties
expect seamless continuity of business whenparties are forging an M&A deal, and they
expect confidentiality to be preserved rightup until the deal is closed.
How can companies surmount these challenges
and sweeten the odds that an M&A deal will pay
off? By making savvy use of BCG’s clean teams.

BOSTON CONSULTING GROUPClean team (n): A separate team withdesignated members who operate in a
so-called clean room that is physicallyand electronically separate from the participating businesses. The team is given
privileged access to both parties’ data, including competitively sensitive information prohibited from disclosure before
deal close (such as customer and pricing
data, purchasing costs, and intellectual
property).
A clean team’s role becomes especially crucial
in transactions where there are regulatory concerns. Our teams proactively obtain data fromthe target and acquiring company, synthesize it,and present it to integration leadership in a clear,sanitized format to enable decision-making.
Whether a company deploys a clean team depends on the level of data sensitivity that an acquirer needs to assess a prospective deal, andthe level of regulatory concern.

03

Need for a Clean Team Depends on Data Sensitivity and Regulatory Concern

Illustrative

Level of data sensitivity

HIGHLYSENSITIVE

SELECTIVELYSENSITIVE• Customer (pricing,volumes, product usage,
terms, account plans)• Sales force structure/
coverage models• Sales force support
processes• General marketingstrategy• Account management
tools• Overall key accountapproach• Culture and change
management• Sales force compensation
structure• Other back-officeprocesses• Marketing expenditureplans• Granular productprofitability• Supplier cost baseline

GENERALLY NOTSENSITIVE• Product development
plans

REQUIRES
CLEAN TEAMTYPICALLY WITHIN A
CLEAN TEAM IFREGULATORY CONCERNTYPICALLY DOES NOTREQUIRE A CLEAN TEAM

Level of regulatory concern

LIMITED

MODERATE

HIGH• Little competitive overlap• Some competitive overlap• High competitive overlap• Digital clean room forcertain documents so bothgroups have access• Digital clean room andprocess to share and track
all data moving across allteams• Physical off-site building
with lawyers present for alldata and all teams• Lawyers review andapprove data requests• Mix of BCG and client A/
client B teams performing
analyses• Shared synthesized output
with client A/client B
teams pre-close• Most sensitive teams
established as completely
clean teams with nodata flowing between
companies• Clean team analyzes
sensitive data andsanitizes results sharedwith management after
legal approval• Lawyers review andapprove all data requests• Clean team performs
analyses, which aredouble-checked for
accuracy by client retirees• No clean team analyses
shared until post-close

Source: BCG

04 							THE CLEAN TEAM ADVANTAGE

Real Deals, Real Results:
BCG Clean Teams Supported
Coop’s Big Buy

When Norway’s Coop grocery chain was
pushing to purchase rival ICA’s stores in the
country, BCG—including its clean teams—
played a key role in ensuring a successful deal.
Though the deal was modest on a global scale,it was large for Norway. And it was anything
but straightforward. Coop had a complex
cooperative structure. Moreover, though Coop
faced little competition for ICA’s assets, a
misstep would have severe consequences for its
market share, which had come under pressure
from increased market consolidation.
The stakes were high, and BCG assisted withevery phase of the deal process, from the earliest
due diligence through synergy verification
to deal execution. Throughout, we worked
shoulder to shoulder with Coop’s project team,legal advisors, auditors, and financing bank.
Our contributions included driving the pace andsequencing of the process, managing internal
stakeholders, acting as the commercial andmain coordinating advisor, modeling synergy
opportunities for key functions, modeling local
competition for every store in the Norwegianmarket, building a business case and valuation
for the deal, and helping lawyers develop
documentation for filing.
A pivotal part of the business case for thedeal was realization of improvements incost of goods sold (COGS). But because thedeal would come under scrutiny from theNorwegian Competition Authority, the postmerger integration (PMI) planning process

BOSTON CONSULTING GROUP

was tricky to navigate. Prior to closing, BCG
deployed clean teams to determine thesourcing synergies (both COGS and goods not
for resale, or GNFR). To accomplish this, ourteams drew on BCG’s broad experience with
COGS work to estimate the supplier terms andsize relationship. In particular, the clean teamdeveloped a methodology aimed at analyzing
differences in supplier terms on an absolute net
level (that is, complete terms).
The results of the clean team’s work featured
substantially in the business case that BCG
developed for the prospective deal, with eachbusiness function committing to the synergy
targets developed from the clean team work.
The team’s efforts also helped ensure a strong
fact base and improved Coop’s readiness andability to run any renegotiations quickly. Indeed,
the team laid the groundwork to support
deployment of a full-scale team to engage insupplier renegotiations (COGS and GNFR).
The entire end-to-end initiative, from strategic
consideration to deal execution to postmerger acquisition, called for rigorous process
management—a staple of BCG’s approach. And
the effort paid big dividends. Coop cemented
its place as firm No. 2 in the market and wasable to realize very high run rates in just a few
months of the deal’s closing. Within two years
after the acquisition, realization of substantial
synergies in functions such as procurement,
logistics, and stores helped transform a loss ofroughly NOK 600 million into a profit of NOK
700+ million.

05

A Powerful Weapon for
Enhancing M&A Success
BCG clean teams help unlock value essential
for PMI success. While many companies thinksuch success hinges on what happens after thedeal legally closes, it’s the strategic and tacticalchoices made before the close—often even
before the bid has been made—that ultimately
determine an integration’s fate.

Clean teams may be deployed in each of thephases of an M&A deal: pre-signing, pre-close,
and post-close.

That’s where a clean team comes in. For
example, our team can:During the pre-signing phase of a retailbanking merger deal, the acquiring bankruns a clean team to determine whether
any customers overlap the two banks andby how much—overlapping customers’
deposits go beyond the government
deposit guarantee. This work enables thetwo banks to be aware of the potential
transfer of deposits and corresponding
value leakage from the combined entity
post-transaction, so they can adjust thedeal terms appropriately.

• Pinpoint, analyze, and quantify potential
synergies, with an eye toward setting
provisional synergy targets and crafting apreliminary plan for achieving them.
• Identify common customers across thetwo companies and define a coordinatedapproach for serving and communicatingwith them.
• Tackle HR-related challenges, such as
understanding differences in benefits
programs and compensation structures
across the two companies and defining whenand how they will be aligned.

Retail Banking:
A Clean Team Case in Point

Clean Teams Help Accelerate Planning in Areas with Commercially Sensitive Data

Sensitive data

Input

Company A

Analysis

OutputPrior to closing

Prior to closing

Clean
Team

Company B

Source: BCG analyses

06 							THE CLEAN TEAM ADVANTAGE

THE PRE-SIGNING PHASEBCG clean teams enhance the odds of aneffective M&A due diligence process in several
ways. For instance, they may:
• Undertake confirmatory due diligence onbehalf of the acquirer on sensitive target
material to ensure there are no deal breakers.
• Develop a business plan containing sanitizedsensitive material that fully reflects thetarget’s value.
• Conduct a detailed synergy assessment tohelp the acquirer fully value the deal without
overpaying.
Without clean team support, an acquirer may
be limited in the level of due diligence it canconduct. As a result, the company may risk
leaving value on the table or overpaying for theasset. For example, it might excessively riskadjust its bid for the missing due diligence,causing the seller to walk away because it
believes the potential acquirer has undervalued
the target or has put too many conditions on
its bid price. Alternatively, the acquirer might
overbid, because outside-in synergy benchmarks
overestimated the potential value creation or thedue diligence missed critical issues hidden incompetitively sensitive information. The result?
Immediate value destruction.
In the pre-signing phase, then, the clean team canplay a key role in supporting the deal valuation oroffer price. During this phase, the team’s work
remains at a relatively high level. The work is
benchmark-driven but based on more granular
data than the two companies involved are able orwilling to share directly with each other.

BOSTON CONSULTING GROUP

For instance, during due diligence, BCG’s clean
teams may look at the top 100 customers of thetarget company and identify those that overlap
with the acquirer, but we won’t look at all 500
customers. We might look at third-party spend
at the category level and apply procurementsavings benchmarks versus examining individual
vendors at a subcategory level.
THE PRE-CLOSE PHASE
After a deal is signed but before it closes,
both companies must continue operating
independently under separate management
and competing against each other. For example,
there is no joint bidding, no pricing alignment,
and no joint decision-making on products.
Consequently, the companies are limited in how
much integration planning they can conduct.
This period leading up to close can last for up to
12 months, or even longer in large M&A deals.
BCG clean teams are often deployed during thistime to accelerate value capture post-Day 1.
During the pre-close phase, our clean teams canprovide support on a range of sensitive activities.
Examples include assessing cost-reduction
potential for direct and indirect procurement
spend, identifying revenue synergy and dissynergy potential from cross- and up-sellingto the combined customer set, defining joint
product development and R&D roadmaps, andsetting the stage for decision-making on key
topics, such as location of headquarters forthe combined entity and choice of end-statetechnology stack.

07

TOP BENEFITS OF USING A CLEAN TEAM DURING PRE-CLOSE

01

02

03

Taking advantage of
regulatory windows.
A regulatory window—
the period during which
antitrust authorities and otherregulatory bodies review
the proposed transaction
to decide whether or not toapprove the deal—can lastfrom a few weeks to several
months. While the window is
open, both companies are in a
holding pattern. A clean team
can take full advantage of thewindow by pushing forwardwith analyzing sensitive
data to keep the integration
planning process rolling.

Organizing vast volumes ofdata.By managing PMI data
requests from start to finish,
the clean team effectively
organizes huge volumesof target-company data sothat it’s ready for Day 1. The
acquirer would all too easily
get lost in the data if it were
all shared raw post-close.
Transitioning from the target’s
data reporting and planningsystems to the acquirer’s canalso prove difficult, slowing
down integration efforts post–
Day 1. The clean team eases
this constraint by gaining
agreement on the acquirer’s
preferred format for thedata, and translating thetarget’s data into that format,
clarifying differences between
the two.

Comparing businessperformance anddocumenting key learnings.
The clean team gets afirst shot at analyzing theperformance of key functions
within both companies.
The team can synthesize
its insights into a handover
document about individualfunctions, customers, orbusiness units at the twocompanies to fill management
teams’ knowledge gaps. Thisfacilitates quick handover ofthe business and strategicplanning for the new entity tostart almost immediately on
Day 1. The clean team also
compares the target’s futureplanning documents against
the business model built
during due diligence. It canflag any significant differencesin assumptions and relay
those to the acquirer, as apreemptive warning at close.

04

05

06

Making the acquirertarget relationship moreproductive. A clean teammakes communication
between parties moreorganized by setting forth clear
responsibilities, deliverables,
and touchpoints among theteam itself, the acquirer, andthe target.

De-risking Day 1 by enabling
key decisions. Across all of
the support functions (IT,HR, etc.), a clean team cancoordinate communication
between the two parties, thus
enabling a seamless transition
from seller to purchaser on
Day 1.

Jump-starting synergy
capture. By focusing thedeal’s integration team onvital issues and making
recommendations, clean
teams support a speedy Day
1 transition into running
the new business as usual.
Equally vital, the team
expedites synergy capture
by enabling the acquirer toimplement new strategies
almost immediately.

08 							THE CLEAN TEAM ADVANTAGE

THE POST-CLOSE PHASE
Once a deal closes, BCG clean teams share thedata packages and raw unsanitized analyses withthe deal parties’ PMI teams. This enables the twobusinesses to seamlessly transition to a single,
integrated set of systems instead of enduring
a bumpy cutover. It also helps the new entity
more quickly realize the prospective synergies
identified during due diligence.

Without a clean team, all the sensitive data
consolidation and analysis would still haveto occur on Day 1. That would delay synergy
capture and put business continuity at risk. Suchdelays come with a high cost. We estimate thata clean team gives an acquirer a head start ofseveral months during which the company cantake steps to ensure a successful integration.
Realizing $600 million in run-rate synergies one
month earlier than initially targeted could be
worth as much as $50 million in monthly profit.

Clean Team Enables Acceleration of Synergy Capture

Accelerating $600M run-rate

synergies by one month translates into

$50M monthly profit impact
Run-rate synergies ($M)
600

400

WITH CLEAN TEAMWITHOUT CLEAN TEAM
200

0
Day 1

Y1 Q1

Y1 Q2

Y1 Q3

Y1 Q4

Y2 Q1

Y2 Q2

Y2 Q3

Y2 Q4

Y3 Q1

Y3 Q2

Y3 Q3

Y3 Q4

Run-rate at end of each quarter post-close

BCG CLEAN TEAMS ADD VALUE BY:•

Accelerating realization of synergies•

Mitigating risks by identifying them early on and crafting strategies to surmount them•Speeding up systems integration after close to transition into a single business•

Enabling business continuity after close for customers, suppliers, and employees

BOSTON CONSULTING GROUP

09

A Closer Look at What
BCG Clean Teams Do
BCG’s clean teams typically manage three categories
of activities: building baselines, developing synergy targets, and preparing options for key decisions.

BUILDING BASELINES
Our clean teams build baselines to enable a liketo-like comparison of both deal participants’performance. These activities help facilitatesynergy identification and design of the newentity that will come into existence after theclose.
For instance, during each engagement, ourteam develops a detailed compilation of bothcompanies’ P&L and full-time employee (FTE)
data for synergy analysis and tracking. We also
create a comprehensive sales baseline with
regional and business units split, to provide fulltransparency into combined sources of revenue
if the deal were to close. We put together aprocurement baseline in the form of a jointspend cube to identify overlaps in material thirdparty spend. And we develop an overview of bothcompanies’ global and local IT systems withan eye toward harmonization of the different
systems after Day 1.

10 							Baselines for identifying possible synergies
between the two companies draw on informationsuch as:• Overall business financial performance• Function-by-function costs• Detailed customer data
• Relative pricing of products• Detailed procurement data
• R&D pipeline spend• Supply chain operations and networks
After building these baselines, our clean teams
sanitize and share them with the relevant
functional workstream leaders. We then help
them conduct analyses aimed at developing
plans for realizing savings in particular costbuckets (such as applying volume purchasing
discounts to overlapping third-party spend andreducing head count in specific functions).

THE CLEAN TEAM ADVANTAGE

DEVELOPING SYNERGY TARGETS
BCG clean teams also facilitate agreement among
the acquirer’s management team on the logic
used to calculate the proposed deal’s prospective
revenue and cost synergies. Our teams
investigate a wide range of synergy categories.

The teams help the acquirer assess synergies byconducting sensitivity analyses on the baselines.
Such analyses may be driven by benchmarks
derived from BCG clean teams’ deal experience.
The analyses may also be bottom up—leveraging a methodology or a set of rules(such as guidelines for organizational design or
warehouse-pallet configuration) to which theacquirer has agreed.

BCG Clean Teams Investigate Multiple Synergy Categories

RECURRING

PURCHASING

MANUFACTURING

LOGISTICS

R&D

SALES ORGANIZATIONSUPPORT/ADMINFUNCTIONSADVERTISING &MARKETING

REVENUES

ONE-OFFSWORKING CAPITALDIS-SYNERGIESCAPEX

REVENUES

Source: BCG analyses

BOSTON CONSULTING GROUP

11

PREPARING OPTIONS FOR KEY DECISIONS
BCG’s clean teams help clients assess theimplications of key decisions under consideration,such as the complexity of consolidating
outsourced providers and SKU rationalization.
In addition, they assist clients in planning for aseamless cutover, with an eye toward ensuringbusiness continuity once the deal closes.

Examples include IT systems cutover andsales force transition. While performing these
activities, our clean teams gather and analyze
large volumes of data. Some of it can be shared
before closing the deal, and some afterward.

Some Data Is Shared Before Closing, Some Afterward

BUILD
BASELINE

SHARED
BEFORE
CLOSE

SHAREDAFTER
CLOSE

DEVELOP SYNERGYTARGETS

PREPARE OPTIONS FORKEY DECISIONS• Top-level financials• Revised synergy logic• Summary conclusions(e.g., % customer overlap)• Reestimated targets• Prioritized list of issues(e.g., product line choices)• Key issues andimplications (e.g., sales
FTEs overlap)

Detailed financials bybusiness and product line
Data book by function, such as:• Customers/vendors• Costs/performance• Summary implementation
challenges• Potential options for eachissue and evaluation logic• Revised business plan

• Summary conclusions(e.g., options x and yeliminated)

Detailed analysis behindrevised synergies, such as:

Detailed analysis behind
option evaluation, such as:• Vendor details• Targeted cross-sell lists• Functional performancedetails• Detailed operations data

• Relative product cost
structures• R&D site head countand cost information byfunction

BCG CLEAN TEAMS ADD VALUE BY:•

Helping both parties develop a like-for-like comparison of combined
business performance•

Efficiently and effectively orchestrating large volumes of data to reducecomplexity and to generate insights that support strategic decision-making•

Identifying the key synergy levers from the newly combined company

12 							THE CLEAN TEAM ADVANTAGE

Defining a Clean Team’s
Scope and StructureWith every engagement, BCG defines each of ourclean teams’ scope and structure to reflect theclient’s unique situation and needs. The needfor a clean team arises from three fundamental
legal requirements:• No merger shall go into effect until regulatory
approval is secured.
• Exchange of commercially sensitive
information is prohibited before approval.
• No pre-close coordination between the twoparties is allowed that would lessen or impair
current or future competition between them.

To determine the right scope and structure for aclean team, companies must consider a numberof factors, including:• Level of direct competition/antitrust concern• Breadth of potential synergies• Degree of commercially sensitive overlap• Overall deal complexity
BCG has implemented a variety of clean
team designs in the course of our work withclients to address the range of factors above.

Clean Team Design Depends on Each Client’s Unique Situation

CLEAN TEAM “LITE”

WHAT
IT IS

WHY
USE IT• Mostly “open”
environment driven
by acquirer’s line
management• Discrete clean team tofilter and disseminate data
as appropriate• Higher likelihood of
approval• Lower need for insider
data or accelerated
synergies pre-close• Shorter duration untilclose

HYBRID“EVERYTHING CLEAN”• Combination of “lite” andtargeted clean teams• Integration largely carriedout in clean teams• Targeted clean teams
focus on acceleratingsynergies and provide
additional gate for highrisk information• Significant amount ofdecision-making by team• High need to acceleratesynergies pre-close• High uncertainty of
approval• Some existing/publicknowledge of acquired
firm• High competitive overlap• Predictable business• Hands-off acquirer• Limited time until close• Low risk of non-approval

Assimilate data/prepare analysis
Prepare specific recommendations
Source: BCG analyses
BOSTON CONSULTING GROUP

13

Establishing and Runninga Clean TeamBCG clean teams sit between the two deal parties. The specifics of the process and the degree of interaction
between BCG’s clean team and the parties vary, depending on the circumstances of the deal in question
and approval from external legal counsels.

To establish and run a clean team for clients, we deploy a four-phase process:

1

2

3

4

Setting up theteamCollecting andanalyzing data

Clearingteam output

Discussing
team output

14 							THE CLEAN TEAM ADVANTAGE

Clean Teams Sit Between the Two Deal Parties

INTEGRATION LEAD/
PROJECT MANAGEMENT

1

3

2

ACQUIRER

CLEAN TEAM

4

5

2
4

TARGET

3

6

RELEVANTRECIPIENTS

1

5

Project management
decides on scope
jointly with clean
team and legal
counsels

Clean team aligns
data from bothsides, runs analyses,
and prepares output

2

6

Clean teamdiscusses planned
analysis and data
requests with bothpartiesClean team releases
sanitized output
after clearance fromexternal legal counsels(prior to Day 1) orwithout legal clearance(after Day 1)

3

4

Guided by cleanteam, both parties
collect datainternally and sendback to team

BOSTON CONSULTING GROUP

15

PHASE1
Setting up theteam

In the pre-signing phase of a deal, BCG clean
teams are usually set up as discrete entities
that receive and analyze a range of sensitive
data from both parties for the purposes of due
diligence and development of a business plan.
Once the deal is signed and the transaction
moves to the pre-close phase, BCG clean teams
are often created as subsets of our clients’ PMI
workstreams. The full clean team is not always
required post-signing until information protocols
are set up and data begins to flow. However, it
is important to have the full clean team up andrunning at least several months before the dealis expected to close, providing ample time tocollect and analyze the data essential for Day 1
preparation.

16 							To start the setup process, BCG and legal
experts meet with senior executives and legal
advisors from both participating companies todiscuss the structure and engagement rules forthe clean team relevant to the deal. All parties
agree on three-way contracts between bothcompanies and BCG. Important topics coveredin these discussions include the possible use of“implants” in the clean team and legal protocol
issues.

THE CLEAN TEAM ADVANTAGE

Clean team implants.
During setup of the clean team, each party may
decide to include “implants”—members fromone or both deal parties who will be embeddedin the team and allowed to work with sensitive
data under the conditions of the clean teamagreement. This approach has advantages andpotential disadvantages.
To get the most value from experts implantedin the clean team, we recommend weighing thebenefits of their involvement in the team against
the resulting restrictions in their day-to-day roles
until Day 1. By using upcoming retirees or people
in rotating management roles, parties may beable to limit negative impacts on the business,
especially if there’s a chance the deal could fall
through.
If the decision is made to use implants, it’s
important to ensure they bring the rightexpertise. If implants will be from the twocompanies, ideally they should have similarlevels of expertise. All implants will need to
be properly briefed by the legal teams on the
do’s and don’ts of clean teamwork and, whereapplicable, get contract amendments. Finally,for clean teams that include implants, parties
should make sure all IT requirements (such as
disconnected smartphones and computers) arein place before the team’s work begins.

Legal protocol issues.
Attending to legal protocol is vital during theclean team setup stage. The clean team legal
protocol is a set of rules of engagement to guide
how employees from the buyer and seller shouldinteract between signing and closing of thedeal, in terms of communication, data sharing,and behavior. The legal protocol ensures thatkey questions regarding data exchange—suchas which data can and cannot be shared andwhether each data request and delivery mustgo through legal clearance—are thoroughly
discussed and documented in the contracts.
The legal protocol is required to ensurecompliance with antitrust law. Failure to comply
can delay closing, escalate legal fees, trigger
substantial fines, and even lead to failure to getgovernment clearance for the deal. Legal counsel
circulates the protocol immediately after theannouncement of signing, and provides explicit
antitrust compliance and clean room training at
the integration kickoff.

Pros and Cons of Using Clean Team Implants
Pros: Implants can . . .

Cons: But implants may also . . .

· Deliver expert knowledge in areas such as data
analysis and industry expertise· Be unable to continue working in their current role
when assigned to a clean team· Help engender acceptance of clean team’s workin the deal parties’ organizations· Be restricted from returning to a role related to theirclean teamwork until Day 1· Facilitate access to required data

· Be barred from working in any role related to theirclean teamwork if the deal is ultimately terminated· Serve as the first points of contact post-Day 1

BOSTON CONSULTING GROUP

17

PHASE

2
Collecting andanalyzing
The pre-close data-sharing process unfolds
over multiple stages: uploading data requests,
reviewing the requests, fulfilling the requests,
sanitizing and reviewing the output, andcirculating the output. Each stage in the process
is managed by a different entity.
Our work with clients has shown that letting
the different departments of the acquiring
company generate their own data-request lists
leads to variance in specificity of the data andways of categorizing what could be similar data
requests. Later in the data collection process,this variance can create delays and potential
leakage of information.

For this reason, BCG strongly advises clients to
let the clean team:• Generate the initial data request and submit
it to both parties• Address alignment needs regarding data
quality and understanding the structure of
the final output to meet the acquirer’s needs• Analyze consolidated data according to thealigned target output• Discuss questions and check analyses
individually with both parties’ project leaders(respective data only)• Secure individual sign-off from both parties
All data is gathered and maintained under strict
rules throughout the clean team’s engagement.

Pre-Close Data Sharing Follows a Rigorous Process: Example

Uploadrequest

Review
requestFulfillrequestSanitize andreview output

Accessdata

Requesting
integration
planning teamProject
Management
OfficeResponding
integration
planning team

Clean team (CT)and legal

Requesting
integration
planning team

• Categorize
requests- Nonsensitive:
can share data
- Sensitive:
requires CT
analysis• Consult with legal
as needed• Inform responding
integration
planning team of
new data requests• Download requestfrom e-room• Direct request
to respective
integration
planning teams• Integration
planning teams to
upload requested
data- Upload directly
to integration
planning teamfolder- Upload to CT
folder only
• Inform PMO andcounterpart thatdata request has
been fulfilled• Discuss purposeof data need withcounterpart• Complete data
request template
and upload toe-room by 12noon PT daily• Data request
to be reviewed
within 24 hours

18 							• CT to perform
analysis andsanitize data
• CT to iterate on
sanitized output
with legal asneeded• Legal to review andapprove sanitizedCT output• CT to upload
requested data to
respective e-room- Upload sanitized
output directly
to integration
planning teamfolders- Unsanitized data
to remain in clean
room for postclose• Download
requested data
directly frome-room• Update templateand close request

THE CLEAN TEAM ADVANTAGE

PHASE

3
Clearingteam output
The BCG clean team meets with legal advisors ofboth parties as well as with BCG’s legal experts.
They discuss the sanitized output of data
analysis that will be reviewed during steeringcommittee meetings with lawyers from bothparties. The steering committee—comprising
the future management team of the new entity
plus several others—uses the sanitized data
analysis to make high-level decisions, such as
who the Level 2 leaders of the new entity will be
and which brands will be prioritized.

Release Before Day 1 Requires Clearance by Lawyers
Pre-alignment of data structure is not required, but it
speeds up release process and ensures effective work

Draft structureof data release

Structure

Draft structureof data releasewith dummy
data

Legal
pre-alignment

Actual data
release request

Legal approvalInternal
lawyers

Internal
lawyers

Commercial
reasoning:“Do we want
to share thisinformation?”

Commercial
reasoning:“Do we want
to share thisinformation?”

External
lawyers
Antitrust
law: “Whichinformation
could legally bereleased under
antitrust laws?”

Raw Data

Pre-aligned
data release
requestExternal
lawyers

Sanitization/
modification

ReleaseSanitization &modification

ReleaseLawyers’feedback
incorporated

Data upload
to green dataroom

Antitrust
law: “Whichinformation
could legally bereleased under
antitrust laws?”

Source: BCG analyses

BOSTON CONSULTING GROUP

19

PHASE

4
Discussing
team output

With senior executives and legal advisors fromboth deal parties, the BCG clean team andlegal experts discuss the sanitized output of thedata analysis with the steering committee. This
meeting is supervised by lawyers from both deal
parties.

If regulatory approval is granted, the deal isclosed, and the clean team is officially open. At
this point, members of the team can share all
information learned and insights gained fromthe pre-integration planning with the acquirer. In
our work with clients, we have found that a clean
team readout to key implementers and decisionmakers within the first few days after closing
helps kick-start integration post-Day 1.

BCG CLEAN TEAMS ADD VALUE BY:•

Fostering alignment on data requirements (such as completeness andconsistency) and on structure of date analyses in final output•

Finalizing sanitized and unsanitized materials in close alignment with bothparties’ lawyers•

Building clear and convincing outputs that meet clients’ businessand legal needs

20 							THE CLEAN TEAM ADVANTAGE

Best Practices for Getting theMost from Clean Teams

01

02

Carefully judge
when to “go clean.”Get the clean team’s
scope and structureright.

Consider the unique needs ofthe M&A deal and the best
possible timing to activatea clean team. Activating too
early can pose risks such asteam distraction or excess fees.
But an early start can also help
acquirers capture vital data
before key personnel at thetarget company leave.

Minimize the amount of
information, analysis, anddecision-making allocatedto clean teams. Extensive
nonsensitive information
can be collected w ithout
such teams. Ensure businessconsiderations and legal
requirements are key driversof the clean team’s work. Make
sure the clean team’s structure
mir r o r s t h e in t e g r at i o nplanning team’s structureso that there are clear pointperson interfaces.

04

05

Be inclusive as
appropriate.

Use templates.

Involve each party’s line
mana ger s in p r e - clo s e
integration planning. Trainmembers of the clean teamand functional teams to fostera shared understanding of
how the integration work will
be done. Establish a cadence
for face-to-face meetings withstaff at the acquired company
to foster inclusion.

BOSTON CONSULTING GROUP

03
Allow sufficienttime.
The overwhelming majority ofplanning (for example, synergy
targets and organizational
bluepr int for the futurecombined entity) should bedone in integration planningteams before close. Thisapproach improves the odds ofsuccess.

Before the clean team begins
its work, collaborate withfunctional teams to develop
templates that clearly define
the needs to be addressedby the clean team. Make
the templates specific andactionable.

21

Deals That We’ve
Helped Happen
2020
2020

2020

2020

2020

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

$21B

$16B

$8.5B

$5.0B

2019

2019

2019

Clean team as an integral
part of PMI preparation

Strategic advisor on PMIStrategic advisor on PMI

$66B

$28B

$2.2B

2019

22 							THE CLEAN TEAM ADVANTAGE

2018
2018

2018

2018

2018

Strategic advisor to thebuyer and Strategic advisor on PMIStrategic advisor to thebuyer and Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

Value not disclosed

$484M

$410M

$400M

2017

2017

2017

2017

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI$23.55B$760M

Value not disclosed

$550M

2017

2017

2017

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

$370M

$340M

$1B

2016

2016

2016

2016

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

$990M

$800M

$3.5B

$2.4B

2017

2016

BOSTON CONSULTING GROUP

23

Meet Our Team
BCG’s experts represent a rich and diverse group whose
experience comes from solving the key issues faced bycompanies around the world. For every focus area, we also have
local experts who provide pivotal insights into the dynamics ofindividual markets.

Jeff Gell
Managing Director and Senior Partner
Jeff Gell is a Managing Director and Senior Partner based in BCG’s Chicago office. He
is a core member of BCG’s Consumer, Operations and Corporate Finance and Strategy
practices and leads the Transaction and Integration Excellence business globally.

Chris Barrett
Managing Director and Partner
Chris Barrett is a Managing Director and Partner based in BCG’s Dallas office. He joinedBCG in 2001, and he has worked on Post-Merger Integrations across many industries, geographies, and topics. Chris has also worked in our Los Angeles and Amsterdam offices.

Dr. Jens KengelbachManaging Director and Senior Partner
Dr. Jens Kengelbach is a Managing Director and Senior Partner based in BCG’s Munich
office. He is the Global Head of M&A and the Leader of the BCG Transaction Center.

Dr. Matthias Krühler
Managing Director and Partner
Dr. Matthias Krühler is a Managing Director and Partner based in BCG’s Hamburg of­fi ce.
He is the Global Head of Transactions in Utilities and also the Head of PMI in the Germany and Austria region.

24 							THE CLEAN TEAM ADVANTAGE

BCG’s Corporate Development Practice Encompasses:

More than 150 partners and
700 trained profetssionals
across all seniorities, eachwith significant experiencein corporate development
and corporate finance.

Teams that always combine
the specialist’s expertisewith our proven industry
expertise, bringing strategic
know-how to all industries
and geographies.

A “solution first” mindset tohelp constructively manage
the dealmaking process atthe strategic “macro” level
as well as at the levels ofdetail required.

Daniel Friedman
Managing Director and Senior Partner
Daniel Friedman is a Managing Director and Senior Partner based in BCG’s Los Angeles
office. He is the Los Angeles Office Leader and the Leader of the Transaction andIntegration Excellence Business in North America.

Jesper Nielsen
Managing Director and Senior Partner
Jesper Nielsen is a Managing Director and Senior Partner based in BCG’s London office.
He is currently the Regional Leader of our Transaction and Integration Excellencebusiness in Western Europe and South Africa.

BOSTON CONSULTING GROUP

25

Teemu Ruska
Managing Director and Senior Partner
Teemu Ruska is a Managing Director and Senior Partner based in BCG’s Helsinki office.
He is the Regional Leader of our Transaction and Integration Excellence business inCentral and Northern Europe and Middle East.

Rahul Khubchandani
Associate Director
Rahul Khubchandani is an Associate Director based in BCG’s London office and has
been with BCG since 2016. He is a core member of the Corporate Development practicearea and the BCG Transaction Center.

Rogier de Boer
Partner and Associate Director
Rogier de Boer is a Partner and Associate Director based in BCG’s New York office. He
joined BCG in 2011. Previously, Rogier was a consultant at Accenture specializing in
growth and innovation.

Uwe BerberichManaging Director and Partner
Uwe Berberich is a Managing Director and Partner based in BCG’s Düsseldorf office. He
joined BCG in 2010, and is a core member of the Corporate Development and Industrial
Goods practice area as well as the Corporate Finance Task Force.

26 							THE CLEAN TEAM ADVANTAGE

BOSTON CONSULTING GROUP

27

Read All About It
Our clients operate in nearly every industry and region aroundthe world, and they come to us for fresh approaches to theissues that matter most to them. Through a rigorous analysis
of each client’s individual situation, we develop customized
solutions that meet the organization’s specific needs. The caseexamples here illustrate how we help clients sharpen theircapabilities, create value, and deliver sustainable advantage.

Transaction and Integration
Excellence Product Series

Sell-Side Success
How BCG Supports Divestitures

Sell-Side Success
How BCG Supports
Divestitures

Successful Business Separations
How BCG Supports Carve-Outs

Successful BusinessSeparations
How BCG Supports
Carve-Outs

Successful Due Diligence
How BCG Supports Strategic Due Diligence

Successful Due Diligence
How BCG Supports Strategic
Due Diligence

Successful Target Search
How BCG Helps Find Strong M&A Candidates

Successful Target Search
How BCG Helps Find Strong
M&A Candidates

28 							THE CLEAN TEAM ADVANTAGE

Successful Merger Integration
How BCG Helps Maximize the Value from a Deal

Successful Merger
Integration
How BCG Helps
Maximize the Valuefrom a Deal

Successful
and Dual Tracks

Successful IPOs,
Spin-Offs, andDual Tracks
How BCG Supports
Effective Transactions

Successful Merger Clearance
How BCG Helps Clear the Path for Acquisitions

Successful Merger
Clearance
How BCG Helps Clear
the Path for Acquisitions

The 2020 M&A Report
Alternative Deals
Gain Traction

BOSTON CONSULTING GROUP

29

BCG’s Transaction Center is the hub of the firm’s global M&A expertiseand provides businesses with end-to-end transaction support, including
strategic decision-making in mergers and acquisitions, preparing
and executing divestitures, and supporting IPOs and spin-offs. The
Transaction Center combines BCG’s deep sector expertise with ourcomprehensive knowledge of, and experience in, all aspects of M&A
across all sectors and industries. These services complement theprocess-focused offerings of investment banks. With more than 300
professionals worldwide, we concentrate on the commercial drivers of
the business plan and equity story. We help both corporate and private
equity clients execute deals efficiently and, more importantly, maximize
value.

Contact:
Dr. Jens Kengelbach
Global Head of M&A
Managing Director and Senior Partner, Munich
Tel. +49 89 2317 4312
kengelbach.jens@bcg.com
https://connect.bcg.com/transactioncenter30 							THE CLEAN TEAM ADVANTAGE

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture
their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients withtotal transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and drivingbottom-line impact. To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deepindustry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge
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