Post-merger integration made easy for sugar companies

26 Sep 2012

Domino Sugar’s acquisition of Tate & Lyle Sugar helped along with a hefty dose of cloud technology.

Post-merger integration or PMI – the process of consolidating the IT systems of two separate companies involved in a takeover – is a major headache for businesses. In fact, consultants at advisory firm Deloitte have estimated that it can erode up to 70% of the value of a deal. In the past, particularly tricky PMI projects have been known to scupper mooted deals entirely in the due diligence phase.

Could the cloud provide a better, faster and less costly approach? The recent experience of UK-based sugar company Tate & Lyle Sugars would seem to suggest that it can; in the wake of its late 2010 acquisition by US company Domino Sugar, the immediate challenge was to separate Tate & Lyle Sugars’ business applications, primarily its core SAP system, from those of parent company Tate & Lyle PLC, and then to integrate them into the Domino Sugar infrastructure.

That sounds like some pretty fancy footwork, but in fact, the process was eased by the fact that, while Tate & Lyle Sugars ran its applications in a traditional data centre set-up, Domino Sugar had already migrated most of its infrastructure to the xStream cloud run by provider Virtustream.

“Our professional services team were deployed in Tate & Lyle Sugars operations to assess the critical systems and critical operations they had, evaluating the compute-network-storage infrastructure and the dynamic demands of that infrastructure,” explains Simon Aspinall, chief of vertical markets, strategy and marketing at Virtustream.

From there, he says, the 3,000-seat SAP system, along with 170 other applications, were migrated to an xStream cloud appliance in Tate & Lyle Sugars’ UK data centre, with a connection to Virtustream’s off-premise cloud nodes in the US. Finally, Virtustream used its own PMI application migration and data archiving methodology to complete the project. In total, the process took sixteen weeks.

At the heart of the integration project is Virtustream’s xStream, which allows Domino and Tate & Lyle Sugars to provision, manage, meter and bill for global computing consumption, according to a standard unit of cloud capacity called a micro-VM.

“Not only was the xStream solution a powerful catalyst for the integration process but, going forward, has provided new business opportunities with improved agility and performance,” said Ian Bacon, president of Tate & Lyle Sugars.

“Domino Sugar and Tate & Lyle Sugars showed a tremendous vision in recognizing that cloud can accelerate post-acquisition integration, particularly around resource efficiency and cost reduction,” said Virtustream CEO Rodney Rogers. “The result is a more dynamic, rapidly integrated business.”