Random Thoughts & Observations of an M&A Deal

Seventeen Years & Going Strong

As Boss Equity celebrates its 17th anniversary, please pardon any self-congratulatory tone in this blog post. I hope that you understand that a company founder talking about his company is a bit like a father talking about his child.

As I look back on the hard work conducted by all members of our M&A and marketing team over the past year, I gain a good degree of satisfaction in recognizing what has been achieved and what is yet to come. It has been a very busy six months for all of us here at Boss Equity and we have made significant strides; results for the company have been the best so far and yet, we are looking at better to come.

As a consequence, we are making plans for the next step in the Boss Equity’ journey as we take the business to the next level and spread our network further, extending our service offerings. We also have some exciting changes planned as we bring some new people into the organisation to enable us to offer greater value to the clients we serve in the Information Management sector.

As I sat before my PC with a blank page in front of me, I did not have an idea for my monthly blog.  I usually have a rant or an issue regarding my work in mergers and acquisitions (M&A) that gets my creative juices flowing sufficiently to write my blog.  However, this month despite having a few potential topics in the bank for the future I was not inspired or motivated to write about any of them.

Three M&A Deals in Final Stages

We currently have three deals in the final stages of the process, which always requires a lot of focus and energy.  We have also been working on rebranding the company.  This is not something we decided to do lightly.  There were some areas of our brand and marketing that were working well but also other areas which we knew needed tidying up.  Most of you probably recognise the experience of having those nagging smaller jobs that you know you need to sort but they are not urgent; a bit like a leaking tap. It won’t cause any damage any time soon but nags away at you. 

So, we will be working on all those little “to-do” jobs and clearing them from our list. We have some planned changes that reflect how we now work with our clients. This client relationship has morphed over the years to the extent that we now have a much closer and more extensive role, working with our clients in their businesses. This has been a very positive progression for both Boss Equity and for our clients.  It has enabled us to deliver more value, not just during the M&A process, but in the run up to an acquisition or trade sale, during the preparation stages, which can last several years. 

Know Thyself but Know Your Customer Too

We cannot claim 100% of the credit for these changes as our clients have also been responsible for some of these positive changes.  All we had to do was to LISTEN very carefully.

“Get closer to your clients. So close that they tell you what they want before they realize it themselves”

Steve Jobs

Don’t Jump Before You Have Prepared Your Landing

There are many areas where we see executives making more mistakes or failing to prepare adequately - Too many to list them all here in this blog post. But, without doubt, one of the essential and initial areas that we work on with our clients is clarity over their market position - Is it current and does it reflect the true dynamics of this sector?  A lack of a precise and coherent corporate positioning can create confusion in any M&A process.  Projecting a number of inconsistent stories about your business will create confusion, reduce confidence, negatively impact its reputation and appeal to investors and buyers and even affect its attractiveness as an acquisition target.

Competitive Landscape

Leading on from the above point - and equally important - is the establishment of what we call your “competitive space”. Many companies fail to clearly articulate their key value and are overshadowed by their bigger competitors in "me too" brand positioning.  As a consequence, they are unable to access the limelight they need, in order to stimulate truly substantive growth.  In a nutshell, not creating a clear competitive space will adversely affect value.  Very often the competitive space and value is already there, it has just not been thought through and, most importantly, clearly articulated. 

Knowing the Good from the Bad & the Ugly

When preparing to engage in any M&A process or partnership, it is important to be able to distinguish between the good guys and the bad guys.  Unlike early westerns, they don’t come with appropriately indicated black and white Stetsons; you need to identify who is likely to buy and who will recognize the value proposition of your business. This can sometimes be obvious and sometimes requires knowledge and experience of the M&A world, which is therefore not so easily attainable for you.  

Lifting the lid on M&A

Through many years in the M&A world, I have learned the typical downfalls of the M&A process and I have therefore always tried to lift the lid on the M&A sector and demystify the process.  There is a large number of consultancies in the generic IT space, whose model relies on them instigating a high proportion of assignments every year and completing only a small percentage of these – Quantity over quality.

That means they don’t give complete focus and attention to every client. Their margin is predicated on selling a volume of enterprises at an average value, rather than extracting the best possible result for each client. Furthermore, this means they do not have an in-depth knowledge of the sector or the genuine buyers. They also have limited time to invest in relationship-building and the presentation of their clients to potential buyers. 

Moving Forward

“The more you engage with customers the clearer things become and the easier it is to determine what you should be doing.”

John Russell, President, former V.P., Harley Davidson

It is with the above quote firmly in our minds that we, at Boss Equity, now move boldly forward to a new and improved phase in the services we offer to our clients. Doing what we do is not about creating revenue.  It’s about fulfilling the dreams and ambitions of our clients and enjoying the journey we take with them.  We know that if we love what we do and keep our clients uppermost in our minds, then future success will naturally result.

If you are considering any aspect of mergers and acquisitions or fund raising and would like an informal chat then please do make contact. I would welcome speaking to you.

Mark Edwards - Founder & CEO Boss Equity  

29 February 2016Boss M&A Whispers