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.
Skipper Billy Twelvetrees told GRTV after the win in Brive that the game could have been a tough one to get up for, but that his Gloucester team mates did themselves proud on the night and got a big result.
Reflecting on the 31-20 victory in Brive on Thursday evening, Director of Rugby David Humphreys said that clinching a home European Rugby Challenge Cup quarter-final was the overall aim and duly achieved.
Gloucester may have already clinched a home European Rugby Challenge Cup quarter-final, but Director of Rugby David Humphreys wants his side to finish the pool stages on a winning note in Brive on Thursday evening.
Speaking after Saturday's win, James Hudson was happy to record a bonus-point win against a hugely physical Oyonnax side as Gloucester secured their passage into the European Rugby Challenge Cup Quarter Finals
Billy Burns was a try scorer on his first European start for Gloucester and, speaking after the game, admitted that it was good to get the five points although there are still things to work on before the trip to Brive.
Connacht's 30-20 win in La Rochelle on Saturday evening means that they are the third best placed runners up and will come to Kingsholm for the quarter-final of the European Rugby Challenge Cup in early April.
Gloucester Rugby today confirmed that supporters who have renewed their Club Membership for next season by March 27th 2015 will receive a free ticket for this season's European Rugby Challenge Cup quarter-final at Kingsholm in April.
It was a bit of an arm wrestle at times, but two tries in each half did the trick for Gloucester as they defeated CA Brive by 31 points to 20 at the Stade Amedee-Domench on Thursday evening to secure top seeding for the quarter-finals.
As the Cherry and Whites aim to make it six from six in the European Rugby Challenge Cup against Brive (19:45 ko) this evening, Dan Robson is fully focused on continuing the fine momentum of recent weeks.