Michael James is an independent, trusted advisor and mentor to organisations and private equity firms looking to ensure timely and effective integration of newly acquired businesses. He may also provide unique insight to the risks associated with potential leadership, culture and supply chain gaps as part of the due diligence phase and to the plans to address them post-acquisition.
A recent Harvard Business Review indicated that up to 90% of mergers and acquisitions fail to live up to expectation, with 70% unable to achieve their financial and strategic expectations. It’s only by minimising risk, fostering strong relationships and through effective planning, that businesses can execute viable and strategic take-overs.
With most mergers and acquisitions, the process can be long and tiresome, but by working with Michael James you gain access to an advisor who has walked the walk, someone who can nurture and enhance the relationships and organisational culture between all parties involved.
As a strategic thinker and mentor, Michael James can facilitate and foster this merging of cultures, by delivering support and advice on leadership and culture integration strategy, planning and due diligence.
Michael James enjoys a special interest in working with private equity and engineering firms looking to grow their portfolios; effectively working as a guide and mentor to merger partner leaders who wish to benefit from his extensive experience in the world of mergers and acquisitions.
Types of Mergers
01.
Horizontal Merger
A horizontal merger is where competitors who are selling the same products in the same market merge to form a larger conglomerate. These kinds of mergers are often subject to the Competition and Consumer Act of 2010, that prohibits mergers that will substantially lessen competition in the market.
02.
Vertical Merger
A vertical merger is a merger between businesses that operate in different areas of the supply chain, thereby increasing efficiency and production output. A good example would be a soft drink manufacturer merging with the bottling facility.
03.
Market Extension Merger
A market extension merger is a merge between two companies with similar products and services, but in different markets, with the objective to increase market share, and gaining access to a larger market base.
04.
Product Extension Merger
A product extension merger is where two companies operating in the same market, but offering different products or services, come together to better utilise resources, to provide a competitive advantage.
05.
Conglomerate Merger
A conglomerate merger is a merger between two businesses selling and offering unrelated services and products. This merger can be split into pure conglomerate mergers, where businesses have nothing in common, or mixed conglomerate mergers, where there is an option to extend their product range or services.
Businesses and large corporations actively target growth via mergers and acquisition, especially when there’s a strong need for cultural integration. This is particularly prominent in the private equity and engineering fields.
Michael James is available to take on private equity firms looking to acquire and manage businesses with a sustainable performance potential. As a trusted advisor and specialist consultant, Michael James typically works with organisations who see the value in providing independent, professional advice and mentoring to new merger partners to reduce the risk of losing the new talent acquired or not integrating effectiveness to deliver on the integration benefits expected in the M&A transaction.
Most mergers and acquisitions fail because of staff turnover, cultural changes, and the new and old teams finding themselves in conflict with each other.
Successful take-overs are often due to strong relationships being built between the new and old, and a clear blueprint in place of what the expected outcome should deliver. To enable a smooth transition, it is important to foster strong relationships between leadership teams, workers, and clients.
Objectives
Once you’ve decided whether it is better to merge, or to acquire, then you can itemise the key objectives.
- Industry and market growth
Most mergers and acquisitions fail because of staff turnover, cultural changes, and the new and old teams finding themselves in conflict with each other.
Successful take-overs are often due to strong relationships being built between the new and old, and a clear blueprint in place of what the expected outcome should deliver.
To enable a smooth transition, it is important to foster strong relationships between leadership teams, workers, and clients.
- Create value
In many cases, businesses are acquired for the sole purpose that they possess property or IP that cannot be otherwise procured, or would take too long, and cost too must to do so independently.
- Diversification
Businesses may use mergers and acquisitions to diversify their product range, target market, and business operations.
- Acquiring Assets
In many cases, businesses are acquired for the sole purpose that they possess property or IP that cannot be otherwise procured, or would take too long, and cost too must to do so independently.
- Increased financial capacity
Companies that are limited in their financial strength, may opt to team up with another to increase their capital power.
- Taxation reasons
It can be inviting to acquire a business with substantial tax losses, if it can be ensured that those losses will be recoupable at a later stage. There are many variables in play, and those tax losses may add a substantial amount to the selling price of a business.
- Personal reasons
Sometimes the reason for an acquisition might be less obvious, and more related to the personal needs and wants from the owners or management. Emotional choices can be made without having a clear indication of the financial, or personal impact of such a decision.
Michael James’ role is to provide strategic advice to boards in relation to their M&A integration strategy, planning and monitoring. It is also to arm and equip management with the support they need for a successful integration. Mergers and acquisitions can be very stressful for business leaders, and it is essential that they remain focused during the various stages of the merger or acquisition.
Most members of the leadership team might not have experienced a large-scale merger before, and it is of great help to have someone on-board that has walked the walk before, and can distance himself from the rising tension on both ends.
In reality, most mergers and acquisitions can take up to three years from the lightbulb moment, to execution. A key reason to onboard an external consultant for the project, is that you have someone that will be there from start to finish, someone that can separate emotion from corporate culture, someone to keep an eye on the bigger picture, while everyone is focusing on the finer details.
Michael James will help you keep the focus of your merger, or acquisition, on the need to succeed, and the need to provide expert, integration support to the people, the finances, and the organisations involved for success.
