Case Study

Case Study

Mergers and Acquisitions For A Local Software Company Serving Regionally

A software company dealing with Human Resources and Payroll software. The Payroll software was identified as the need of most companies to ensure accurate computation of wages and salaries of employees. This software allowed the company to have two or more categories of employees as the company would like to have a non-executive group, executive and managerial group. Should the executive group have a good no. of staff, then the manager formed the third group. Each group would have their salaries, incentives, benefits of a different amount.

M&A Case Study Software Company

Initially, the software company started with the manufacturing sector, with attendance clocking electronically and transmitted through wire connection to the desktop for payroll. From manufacturing, the company started to expand to other industries and gained a good percentage of the market share. The company expanded and covered Malaysia and Indonesia and China for payroll administration. A development team for Human Resources (HR) and Training & Development modules was formed. External consultants are engaged to prepare their marketing portfolio and also development of software to integrate all attendance and leave the system, payroll processing system, HR and training modular system into a selection or choice for the buyer to choose.

A global buyer wanted to have their presence in South East Asia and the choice was to start the search in Singapore. The company must be familiar with English, Chinese and Malay. The common language used in the program is English. Nevertheless, China needs Mandarin while Indonesia needs Malay.

This software company was hunted and approached the owner. Within three months more or less, the M&A was completed and implementation took 12 to 18 months to complete the whole process. The employees of the software company were retrenched and received a package under Singapore labor legislation. The new foreign company started to interview the current employees after retrenchment for those indicated to join the new company. 

There are a few advantages to this M&A success case. Firstly, the local company did expect a foreign to acquire them. The price is right, they sell. Secondly, the research and development team got their retrenchment benefits. Thus they were ready to accept the new terms and conditions of the new company. They are passionate about software development work. Further, the new company brings in the new technology and software for these software engineers to transfer their current software to enhance and better software platforms. They were on the new platform. The new company selected the core team that understands the local needs of HR integrated systems. This helps the new company to spring off to more industries and more countries in Asia.