Mergers and acquisitions are the business version of a second marriage – blended business families. Two heads of household coming together with all of their aspirations, customary practices and family idiosyncrasies.
Why Merge Now?
There was a plethora of mergers and acquisitions in 2006-2007; the global economy is now ripe for a new wave.
Acquisitions
With high corporate cash balances, unutilized private equity commitments and low interest rates, the market is ripe for growth and change. Available money and a shifting economy create the ideal timing for an acquisition. Company “I want to make a lot of money and get out” is seeking an Amazon who wants to gobble up companies like the video game Pac-Man.
A business may choose to slip out from under an impending bankruptcy and salvage their remaining business goodwill. Depending on how slippery the financial slope, the company may represent a bargain acquisition opportunity or even a hostile take-over.
Mergers
Don’t kid yourself, in a merger one company is the lead and is acquiring the other company. A marriage is called a merger as well. However, depending on the situation, one person has the final word. Fifty – fifty is an ideal, an illusion. The first few months are the dating phase with a degree of dancing around, testing and maneuvering for position.
Grow or Go?
Have you ever reached the point where your business needed to grow or go? It’s time to choose your side of the deal. To grow you acquire another business. To go you make yourself available to an investment banker, merger and acquisition specialist or a business broker and negotiate for the best deal in the M&A process.
No matter how compatible your relationship at the beginning of the transaction, there will be contentious issues. In a new marriage, everything is a romantic honeymoon. Sooner or later an issue arises where you cross swords; frequently this involves one of the kids. In a business merger, it could be a conflict between employees, a difference of opinion of the two CEOs or a dispute about the handling of a pet client. Regardless of the reason in a business or a personal merger, swords will cross.
An acquisition has its own set of challenges. Both companies tread lightly. The seller knows they do not have much, if any, power or control; the purchaser is anxious to blend the new company into mix as congenially as possible. Retaining employees is far less expensive and more difficult than recruiting new employees. Why spend the capital to purchase a company only to lose all of the valuable talent?
Change Breeds Challenges
After the papers are signed and money changes hands, the real work begins.
Kennedy and Coe, Ansarada, Deloitte and Woodbridge International all offer their services to facilitate the settling in and moving forward process. Look at them as a combination of dating service and marriage counseling; they help buyers and sellers get together and coach them on the productive blending process.
The process involves Denison Leadership and Cultural Integration Surveys, Thomas Killman Instruments and Emergenetics as well as leadership transition plans, coaching and team building workshops. You can take all of the tests for personality, compatibility, leadership and cultural integration. This is all scientific, clinical. Mergers and acquisitions are about people, relationships. Forget that you are dealing with personalities and feelings and failure is only a matter of time. The man and woman who decide to blend their families feel that they are merging, but the kids may feel that they have been acquired.
When dating transitions into daily life, the key is shared objectives. People support what they help create.
Elaine Love writes for PrintPlace.com, Small Business Examiner and Elaine4Success.com. Her expertise is in small business, marketing, mindset for business and speaking coaching. Her credentials include Masters Degrees in Communication, 35 years of entrepreneurial awards including “International Innovator of the Year,” World Class Speaking Coach, and author of 3 books.
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