Acquiring a business with pension obligations
Defined benefit pensions can have a significant impact on corporate transactions and time is of the essence.
Working to tight deadlines, our team helped a multinational business understand their potential pension exposure and model DB pension costs allowing them to quickly decide whether to proceed with the acquisition.
Challenge
We were engaged by a multinational business headquartered in Europe to advise on pension matters associated with the purchase of a business with significant pension liabilities. Their key concern was the expected cash cost of the UK pension plan.
Solution
We advised stakeholders on the UK and Swiss pensions arrangements, including the associated risks, as well as market practice for funding and investment. With our help, they formed a view on how they would approach these matters post-transaction and gained a full understanding of their potential exposure.
Outcome
Following our initial advice, we were able to identify with them a number of scenarios for further modelling, including the potential cashflow from the company to the UK scheme in each scenario. This allowed the client to integrate this with their valuation model for the business. They were then able to quickly make an informed decision on whether to proceed, based on their preferred approach to funding the scheme after purchase.
Contacts
Isabel Coles
Head of International Consulting, MBWL International
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Email:
isabel.coles@mbwl-int.com
Tel: +44 20 3949 5710
Isabel Coles
Head of International Consulting, MBWL International
A multilingual expert in employee benefits for multinational corporates.
Isabel heads up MBWL International, advising multinational organisations on their employee benefits arrangements around the world, with a focus on corporate sales and purchases, accounting disclosures and the financing, risk management and design of benefit plans.
Her vast experience includes leading global accounting consolidations under international, UK and US accounting standards for multinational companies headquartered in the UK and overseas – with consolidations ranging in size from two to over 50 defined benefit plans.
She has advised both corporate and private equity buyers on the employee benefit considerations (including pension liabilities) associated with corporate sales and purchases in Europe and worldwide, from due diligence through to closing and subsequent integration work. Isabel has also undertaken many benefit audits and benchmarking exercises, including a 25-country audit for a company in the technology sector.
Other areas of Isabel’s expertise include reviewing and establishing international pension plans, advice on individual expatriate employee benefit packages and supporting multinationals in agreeing and implementing global governance approaches and policies for managing their employer benefit plans.
Isabel chairs the International Committee of the Association of Consulting Actuaries and is fluent in German and French.
John-Paul (JP) Augeri
Managing Director and Global EB Consulting Leader, Milliman
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Email:
johnpaul.augeri@milliman.com
Tel: +1 347 541 1146
John-Paul (JP) Augeri
Managing Director and Global EB Consulting Leader, Milliman
A global human capital and risk management leader with wide-ranging technical and management experience.
JP joined Milliman to lead the Global Employee Benefits Consulting Practice, in partnership with MBWL. He has over twenty years’ experience helping multinational clients to design, deliver and manage programs globally across pensions, benefits and M&A. He specialises in solving complex global issues and delivering value and innovation to multinationals and their employees.
His expertise includes: global pensions and benefits; M&A; funding, investment, and derisking strategies; change management; total rewards and employee experience; global client management and business development.
He has also served as a board chair and senior advisor, as is a frequent external speaker who has helped lead several client roundtables.
JP is a Fellow of the Institute of Actuaries in the UK, and he has lived and worked in the US, UK, Germany, and Austria.