David Anderson, Partner at Crowe Clark Whitehill, the national audit, tax and business advisory firm with offices in Cheltenham, advises on making your next acquisition a success.
With a revival in corporate activity on the horizon, the sound advice of one of my former clients comes to mind. He once said that a successful acquisition focuses on 'winning the peace following the transaction', rather than 'winning the war during the transaction'. I'm sure this sentiment rings true for all those who have ever been involved in an acquisition.
I read recently that between 70 and 90 per cent of all mergers and acquisitions are doomed to failure. With this in mind, what can be done to minimise the risk of failure and improve the chances of making your next acquisition a success?
The first and most important step is to analyse and understand the reasoning behind the acquisition. What is the motivation for the deal? Is the business looking to acquire additional resources or is it looking for a different business model?
Once you have the answered these questions - which are deceptively simple and yet worth the effort - you can assess potential targets and develop a plan for executing the deal.
Due diligence will of course feature as part of this plan, but aside from the usual legal, financial and tax aspects, a few other matters are worth considering.
If you have a "one-stop shop" rationale and the motivation for the deal is to expand your product range, ask yourself whether new customers will need or want to buy these products at the same time and in the same place. Do your sales staff have the necessary skills to sell the acquired company's products and, of course, vice versa. Finally, be honest about who has the stronger personal skill sets. Within people businesses, such as professional practices, in my experience an attitude of 'acquirer' and 'acquiree' rarely adds value.
The two main deal drivers are the pursuit of additional resources or a new business model. Targeting resources propels most M&A activity by professional practices. Resources and business models are very different and will require a fundamentally different approach post-acquisition. I would recommend the following integration strategies post-deal: If your objective is to acquire resources, integrate them quickly into your existing business and then let the former business 'die'.
Alternatively, if your plan is to acquire a new business model, try not to interfere too much, although make sure to add your own resources and expertise to learn and exploit the advances it brings.
When acquiring resources, such as professional practices, you run the risk that very little time and effort is actually spent on executing an integration plan. People will always need to understand the rationale behind the deal and feel part of it - quickly. A mobile resource can just as easily walk away.
In the case of a new business model, a significant amount of time and effort should be spent on dissecting the product as well as processes and systems. Look at what can be learnt and applied to your existing model as well as the problems that they have encountered and overcome. Real value can be unlocked by this careful investigation. Where such acquisitions can go wrong is the temptation to assume that the acquirer's processes are the best.
Ben Morgan, Tom Johnson and Henry Thomas spoke to Russ Hargreaves this week as they were about to do some DIY work at Chobham RFC as part of Natwest Rugby Force. On the agenda for discussion were, of course, England's forthcoming games but also the trio's painting prowess.
With ADEY Professional Heating Solutions now unveiled as Gloucester Rugby's new main sponsor from July 2013, managing Director Kelvin Stevens spoke to the club website about the reasons for getting involved with the club.
Gloucester Rugby CEO Stephen Vaughan was delighted to introduce ADEY Professional Heating Solutions as the club's new main sponsor this week. He spoke to the club website about the exciting new partnership.
Although understandably disappointed following the 40-39 defeat at Exeter, Freddie Burns thought that both teams fully contributed to a great spectacle but that a couple of refereeing decisions were key to the outcome.
Gloucester's final game of the season ended in a narrow defeat in a pulsating encounter at the Exeter Chiefs. The Cherry and Whites went down 40-39, as Gareth Steenson's dramatic late penalty meant that the end of Director of Rugby Nigel Davies' first season in charge ended in defeat. Davies spoke to the official website in the Devon sunshine.
Dave Lewis was in a tough situation on Saturday afternoon - playing for Gloucester against the side he will join next season, Exeter Chiefs. At the final whistle though, Lewis was simply disappointed to have lost the game.
Tongan second row Lua Lokotui is looking forward to catching up with some old acquaintances at Sandy Park when Gloucester take on Exeter Chiefs on Saturday afternoon, as he and his team mates hope to finish the season on a high note.
During a break from training ahead of Saturday's Aviva Premiership fixture at Exeter, centre Henry Trinder hopes that Gloucester build on the momentum from the recent win over Saracens, and expressed frustration that he's hitting form as the season end approaches after missing time due to injury.
Gloucester Rugby may have already clinched their Heineken Cup spot for 2013-14, but Director of Rugby Nigel Davies stressed this week that it's important for Gloucester to finish their season on a positive note at Exeter on Saturday.
Gloucester Rugby fly half Freddie Burns is hoping to pull on a starting jersey for England when they take on the Barbarians at Twickenham on Sunday afternoon. He made the most of a break from training at Pennyhill Park to speak to the club website.
Gloucester Rugby number eight Ben Morgan this week joined up with the England squad ahead of Sunday's international against the Barbarians at Twickenham, and took time out from training to talk to the club website.