The Art of Mergers and Acquisitions

We have been working with several organizations currently undertaking mergers and acquisitions. Through the years, the logic of these transactions is easy. It is what is behind the scenes in the heart, values, and operational culture of the organizations that gets to be “the art of a successful transaction”. The newer players to the market are too simplistic and downplay the heart, the values and the operational culture.

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Having the deal breakers clear and the reasons for the transaction for all parties involved are critical. Also, interviewing the key people and getting clarity of what is “behind the scenes” is important.

One of the best examples of the complexity of mergers and acquisitions occurred when we had a manufacturing client that sold a business for $40 million. Due to his success, this client felt we were making too big a deal out of doing due diligence for his next big success. He proceeded to purchase four other businesses for $10 million each. All four businesses were in different industries, from retail sales to technology. Within five years, every one of the four businesses had failed. What was successful business leadership and methodology in his first successful business did NOT translate into the other four environments very well.

This client went back to his former business, which was failing for similar reasons under the new owners. He bought it back and is still in business today – happy and successful.

Some questions to consider:

  • What makes your organization great?
  • Does what makes you great translate into an opportunity for organic growth or merger and acquisition opportunities?
  • If your organization bought or merged with an organization, how will you test for a fit with the heart, values, and operational culture?

If your organization needs help navigating the mergers and acquisitions waters, contact our expert guides at 800-786-4332 or email CClemmer@AppliedVisionWorks.com. It only takes 30 minutes to get started!

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