Combining businesses already sounds complicated enough, but add in the conquest of doing it seamlessly while still running both smoothly can be downright impossible. Mergers happen when two businesses join together to create a single, unified company, but they don’t always start like that, and if not handled correctly, it can take months or years. A KPMG study indicates that 83% of merger deals did not boost shareholder returns, an AON/Hewett study shows that there is a 23% increase in “actively disengaged employees” after a change event – even if no one’s job is affected. The slightest hiccup can affect small business owners and their employees, so it’s crucial to master the art of the acquisition.
If you plan on carrying out a successful business acquisition, you must manage defend yourself against what Forbes calls the five horsemen of merger apocalypse: risk, price, strategy, culture and management capacity. They are each important. By making sure to emphasize the leadership, personal, strategic and cultural aspects of each company and the ways in which they match and work together, these five horseman can become assets rather than dangers to your business and new acquisition. Serial AdTech writer Greg Sheppard notes that “the vast majority of companies are looking to grow and maintain a 90% retention rate post-merger or acquisition.” That’s not out of the question, it just doesn’t happen for those who call on the five horsemen by not planning ahead.
Lately, a lot are steering clear of acquisitions. Last year saw $2.93 trillion in mergers and acquisitions close in North America and Europe, down 15 percent from 2016. The falloff was more severe relative to deal volume, as the 19,510 transactions recorded in 2017 fell 16.8 percent from the prior year, according to data compiled for the Business Journals by Pitchbook.com. Why are people moving away from acquisitions? Simple: prices are far too daunting with the risk being so high. The ones who are making two companies merge successfully in 2018 have experience in mergers and acquisitions. SA Capital Partners happens to know quite a bit about that.
When acquisitions work out, changing mature, low-value businesses into much higher-value, growth businesses, all the shareholders are winners. For each buy-side engagement, our experienced analyst will help identify potential acquisition targets & provide the necessary market research. SA Capital Partners will also provide the necessary tools to our clients to raise capital to acquire these businesses. With less people acquiring new businesses, the next great step in your professional portfolio.
About SA Capital Partners:
SA Capital Partners is an innovative financial services firm that specializes in mergers & acquisitions advisory and capital raising for lower middle market businesses. We aspire to give all the tools necessary to complete any transaction. SA Capital Partner’s financial services industry specialists provide comprehensive, integrated solutions to banking transactions. Our breadth of services and industry knowledge allow us to understand each client’s unique business needs. Our goal is to make all financial services available to every small business.