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.
Gloucester Rugby hooker Richard Hibbard spoke to the local media this week as the Cherry and Whites prepare to face Bath Rugby in the Aviva Premiership. The Welshman is ready to bounce back at The Rec.
Speaking to the local media about the local derby against Bath at the Rec on Friday evening, Director of Rugby David Humphreys acknowledged that it will be a tough encounter but hugely exciting at the same time and one the squad are looking forward to.
A visibly disappointed Billy Twelvetrees admitted that it was a very sombre Gloucester dressing room as a last minute try and conversion condemned the Cherry and Whites to an 18-19 defeat against Leicester Tigers on Saturday.
A disappointed Tom Savage told GRTV, after the 18-19 defeat at home to the Leicester Tigers, that the whole Gloucester team had put in a fantastic effort, but just couldn't find the extra one or two percent necessary to put away a top side.
Speaking after the narrow loss to Leicester Tigers on Saturday afternoon, David Humphreys says despite there being a lot of good in Gloucester's performance, he rued the failure to close the game out, as well as thanking the home support
Kiwi second row Jeremy Thrush is thoroughly enjoying his time in Cherry and White so far, and this weekend the Leicester Tigers are the visitors to Kingsholm, and the All Black is massively excited about the challenge.
After two wins in the European Rugby Challenge Cup, securing a home quarter-final, David Humphreys told the local media this week that Gloucester are coming into Saturday's game in good physical shape having rotated the squad. However, he and the squad are prepared for a tough encounter against the Tigers.
Speaking to GRTV after the 14-11 win in Zebre on Saturday, Bill Meakes acknowledged that Zebre had forced Gloucester to dig very deep to earn the win and made a point of thanking the tremendous travelling support.
Speaking after the 14-11 European Rugby Challenge Cup win over Zebre in Parma, Scrum Coach Trevor Woodman admitted that Gloucester hadn't been at their best against a very tough opponent, but had just enough about them to earn the win.
It's almost four years since Gloucester won a Premiership game at the Rec against Bath. However, they got that monkey off their back on Friday evening with a hard-fought 15-11 win in testing conditions.
John Afoa returns to the Gloucester Rugby starting line up to take on Bath Rugby at the Rec in the Aviva Premiership on Friday evening, one of three changes to the side that started against Leicester last weekend.
Great news this afternoon as Cherry and White duo Mat Protheroe and Ollie Thorley have been named to start for England as they open up their Under 20 Six Nations campaign against Scotland in Glasgow this Friday
A number of Gloucester Rugby's Academy players will be part of a Hartpury Rugby squad which will travel to Pennyhill Park on Thursday to train with Eddie Jones' England side in their build up to take on Scotland.