Interviewing for a consulting assignment I was asked ”do you have experience with M&A?” My immediate reply was “successful buys yes- successful implementations-no not really.” I was both too hasty and too forthcoming in my response. My only experience with acquisitions was with international companies, and there was always a flawed implementation to these acquisitions.
I have been involved in the turnarounds of three European subsidiary organizations. They were all initially acquisitions by an American parent. The initial acquisition or start-up was praised as net new local business, acquisition of new customers and a European footprint. Within 24 months, there were warning signs of stress., however, confrontation was avoided, so was corrective action. None of them existed in the present state as successful subsidiary organizations. Within a short period of time each was unprofitable, had lost customers and endured poor relations with the US parent. They ended up with changes to top local management and a corporate black eye with paralytic internal fear of future foreign acquisitions. Turnarounds were performed, but the scars were there far into the future.
What to do differently?
Acquisitions are difficult and even for the best planned ones, integrations will usually be harder. My conclusion is that there is a special skill set for integrating acquisitions. http://www.jimthomasintl.com/service-offerings.html. Most companies <$100MM in revenue have not been through this exercise so adding someone to the team with such experience will minimize the pitfalls of the integration. Lean on outside organizations resources for assistance e.g. www.acg.org , if you don’t have abundant internal resources.
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