Corporate M&A

A global conglomerate faced the challenge of establishing a stand-alone energy business after acquiring 2,500 producing oil and gas wells in Texas for nearly $1.5 billion. The company aimed to set up this subsidiary with operational capabilities within a tight six-month timeline, rather than integrating the new assets into its existing operations. This decision introduced complexities such as designing a lean organization, executing a rapid hiring plan, implementing a new SAP enterprise resource planning (ERP) system, deploying a field supervisory control and data acquisition (SCADA) system, and establishing a supply chain function with over 400 unique suppliers. To address these challenges, the conglomerate partnered with Ernst & Young LLP (EY), leveraging their extensive experience in the upstream oil and gas industry. EY's team provided a structured approach to rapidly stand up the new organization, focusing on both strategy and technology transformation. On Day 1 post-close, EY's Valuation and Accounting teams assisted with the accounting for the transaction, while other EY teams developed a roadmap for building a self-sustaining organization. This included conducting organizational design workshops that resulted in detailed functional transition plans across various departments such as operations, finance, and human resources. One of the critical components of the project was the implementation of the SAP S/4HANA suite, which was completed in just 4.5 months—significantly faster than the typical nine to twelve months for similar projects. This accelerated timeline was made possible by EY's pre-configured Upstream SAP template, which minimized customizations and ensured compliance with SAP guidelines. As the new subsidiary began to fill key roles, EY's hybrid-agile methodology allowed for continuous feedback and adjustments, ensuring that the technology implementation aligned with the needs of the newly hired employees. Ultimately, the new Exploration and Production (E&P) company was fully operational within six months of the acquisition, successfully implementing over 100 processes across all functions and deploying more than 20 applications. Seven months after the deal announcement, the subsidiary achieved its first month-end close and recorded its first revenue, demonstrating the effectiveness of EY's strategic support and innovative approach in navigating this complex transition.

Successfully completed $1.5B transaction

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