Post-sale, WP Glimcher and Michael Glimcher put the pieces together

 

The merger between Glimcher Realty Trust and Washington Prime Group Inc., finalized in the beginning of 2015, was one of the richest deals of the year for Central Ohio.

The Simon Property Group spinoff bought Glimcher Realty Trust for about $4.3 billion, including debt. But the new company WP Glimcher is what Vice Chairman and CEO Michael Glimcher calls a blended family — where each organization brought something to the table.

Glimcher Realty Trust was running about 25 retail real estate assets with 150 corporate associates, and Glimcher says it was known for making those properties more valuable.

When Washington Prime approached Glimcher Realty Trust, it was twice the size from an asset standpoint but had very little personnel. In fact, it was renting its back office functions from the parent company it had spun out from, he says.

“The thing that was intriguing about our organization is we were a company that knew how to take assets from B to A and upgrade them,” Glimcher says. “We also had a platform that they didn’t have and operated in a great city like Columbus, where there’s a tremendous labor pool of highly-qualified, intelligent people.”

This wasn’t the first time Glimcher Realty Trust had been approached. Glimcher says as a public company, you’re for sale every day. But this time, the situation checked all of the boxes.

He says the board had to consider whether the merger was in the best interest of its stakeholders.

The majority of the consideration was in cash, and the premium was almost equal to the highest premium ever paid in the space over the share price, Glimcher says. So the currency and premium were good, and on top of that, it was very employee-friendly because Washington Prime needed personnel to run operations.

“So as a board, you are able to check the box of: I’m taking great care of my shareholders,” he says “I’m taking great care of our associates that brought us here, and so it was … a real win-win.”

But once the deal went through, the hard work began — the integration of these two companies.

Combining into one

Merging two companies creates logistical challenges and a need for many changes.

In an integration where a lot of decisions must be made quickly, Glimcher suggests trusting your intuition, nine out of 10 times.

“Generally, smart people have good intuition, but also we operate a lot on teams, and so you get multiple people’s perspective,” he says. “If four or five people have the same visceral reaction, it’s probably right.”

In WP Glimcher’s case, more than 90 percent of the people who worked at Glimcher Realty Trust stayed on. However, Glimcher says they still added more than 100 associates to their Columbus corporate office, opened a new office in Indianapolis and hired additional people in the field, to get to almost 450 total employees.

Today, about two-thirds of the malls, open-air lifestyle retail and community shopping centers come from Washington Prime, with the remainder a legacy of Glimcher Realty Trust.

“There was a tremendous amount of on-boarding of personnel, and there’s also a tremendous amount of bringing assets onto our platform,” Glimcher says. “Our platform was built for 25 assets. It wasn’t built for 120 assets.”

WP Glimcher built out new systems and utilized technology to help manage the larger company.

Glimcher says the business uses proprietary technology and an app that its salespeople and leasing and development teams can use on their iPads to find company information that typically would fill an entire briefcase.