Mecca Leisure plc acquired Pleasurama plc in 1989. Mecca believed that by creating the UK's largest 'live' entertainment company they would reap synergistic benefits from:-
- Increased purchasing power.
- Removing duplicate administrative functions.
- Improved geographical coverage and national branding of its portfolio.
- Entering the competitive US market.
- Cheaper long-term borrowing.
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Mecca's entertainment division had to integrate 100+ operating units - doubling the size of its estate - but with a 'shallow' organisation structure, integration resources were scarce. As a member of the Integration Planning Team, I was tasked with:-
- Helping to redesign the division's operational and financial structure.
- Assisting the Purchasing department during its re-negotiation of the estates largest purchasing contracts, i.e. alcohol and soft drinks.
- Assisting the Property department with buyer negotiations during the disposal of 35 operating units.
- Reviewing unit information systems - in conjunction with the IT department - to assess technology and capital requirements and draft EPOS/MIS roll-out plans.
- Co-ordinating the estimation, and prioritisation, of unit refurbishment costs.
- Managing the re-budgeting process.
- Training new staff in the company's financial reporting requirements and the development of revised unit controls and procedures.
- Advising the Marketing department regarding the development of, and costs associated with, its proposed brand strategy.
- Establishing procedures to accurately record and manage the costs to be offset against acquisition provisions.
- Joining the team responsible for Pleasurama's accounts office where we:
- Introduced system back-up procedures to protect data from corruption.
- Tightened bank transaction controls, e.g. amended cheque signatories, scheduled and authorised payment-runs, etc.
- Interviewed staff members regarding transfers to Mecca and, where there was opposition to such a move, agreed final payment terms and notice periods.
- Organised four hour turnaround arrangements with staff agencies to cover the inevitable rise in absenteeism and staff resignations.
- Alerted the police to evidence of payroll 'ghosting' and fraudulent payments.
- Evaluated systems and processes for possible re-use by Mecca.
- Conducted an asset inventory and wrote off 'lost' assets.
- Boxed and transferred all documents and records to Mecca.
- Physically closed the Pleasurama offices.
- Estimated the 'fair value' provisions required, agreed them with the auditors and finalised the acquisition accounts.
- Validated incoming data in Mecca's own systems.
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For over six months, Mecca's management team wrestled with the Pleasurama integration before visible progress could be discerned. Then, just as things returned to normal, the Rank Group plc opportunistically bid for Mecca as City sentiment regarding the company's ability to service its debt turned negative.
Key Statistics:-
- Units acquired: 100+
- Increased turnover: £75+ Million
- Additional employees: 1500+
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