An IT insider’s view on a global cross border M&A

The sale of Fitness First reveals the real complexities of integrating disparate IT systems

“Working globally will always bring in different cultures,” says Jon Forster, a consultant global programme director and senior IT adviser, who has been working with Fitness First’s IT team following its global sale. “This has involved dealing with a vast range of different viewpoints, ideas and ways of working. It drives and influences the way the planning has to be undertaken to successfully migrate from the existing infrastructure to how the new owner wants to operate, whether that’s on-premises, SaaS or a combination.”

It’s a challenge, Forster says, is typical of all such deals. In October last year, Dave Whelan, the former JJB Sports owner, bought Fitness First UK in a deal worth an estimated £70 million ($93 million). In Asia, the gym chain merged with Celebrity Fitness creating new brand Evolution Wellness, which now operates 152 outlets, including 46 in Indonesia and 35 in Thailand. In technology terms this is not straightforward.

Speaking from Singapore, Forster is still ensconced although admits the project is nearing an end. So what has been the most difficult aspect of the sale from an IT perspective?

“The sale of Fitness First has been across the globe—UK, Middle East, Australia and six countries across Asia,” says Forster. “It has not been one agreement but a different agreement and a different solution to multiple new owners of each global region. In summary, what has been difficult is each end solution has been different. Each transition has had to migrate from a common base to a different set of solutions. The team has had to work across various end states and keep not just a single focus but a multi focus where each end state is as important as the rest.”

The breakup of the existing IT infrastructure had to be done in a structured, buyer-led manner says Forster, which needed the right internal and third-party resources to be in place. He says that managing a transitional process across multiple countries and ensuring all of them running concurrently is not something you can wholly fully plan for. It takes experience working with multiple Transitional Service Agreements (TSAs) and working in conjunction with the buyer, in-house resources and what the owner wants to deliver to get to a common agreement.

“Successfully managing multiple concurrent TSAs means ensuring any one agreement can be delivered without impacting any other agreement,” he says. So what’s a TSA and why is it important?

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