Acquisitions: how to make a successful deal

Acquisitions can be a tricky business: so here's how to make sure your deal runs as smoothly as possible.

During December 2014 ezbob made the decision to acquire fellow business lender Everline. After careful consideration, many late nights and in-depth discussions with Everline founder, Russell Gould, both parties agreed that the integration of our state of the art technology with Everline’s established sales and marketing channels made sound strategic sense.

The acquisition went through in February 2015, creating the UK’s biggest business e-lender. Integration has gone incredibly smoothly with both brands exceeding expectations. As a combined business we have lent over £80 million and provided over 7,000 loans to SMEs so far and our growth is accelerating.

Since acquisition we have announced investment from the European Investment Fund and Oaktree Capital Investment, as well as a partnership with leading global wholesale trade platform

The decision to acquire another business is not one to be taken lightly. And it doesn’t end with the contracts being signed. Within the multitude of considerations to be taken into account, three over-arching themes soon become clear. Financial viability, strategic fit and cultural synergy. If you get these right, the actual merging of teams will be a lot smoother.

Research, research, research

Though it may seem obvious, the importance of background research cannot be emphasised strongly enough. Know the market, know the competition and know the company you’re about to take on inside out. Invest time and money in a thorough third party to complete due diligence on the legal, operational and financial aspects of the company. It will pay dividends in return.

Know your team

The rate of failure for companies who have been through the acquisition process is notoriously high. In many cases this is due to poor cultural fit. The success or failure of a business is driven by its workforce – therefore the successful assimilation of the new team into the existing one is critical.

>See also: Acquisitions – are you doing your due diligence?

Both teams must be kept updated and involved throughout the process. Both teams must feel valued and confident that there are plans in place for how they will work together and be supported after the acquisition. These plans should be announced internally before the news goes external so that existing employees know what to expect before new measures are put in place.

Respect existing team cultures

Take time to learn the other team’s culture pre-acquisition. This will not only allow for an informed decision as to whether the teams will work together but will also enable you to work out a mutually beneficial working culture in order to avoid forcing values on either team.

That will never work long term, the likely result is resentment and a high turnover of staff. Go in with a clear plan on how the combined company will be structured. Clearly set out key concerns like redundancy policy and have answers to tricky questions in place, so that both teams can be updated upon acquisition.  This will remove the risk of any unnecessary rumours or uncertainty.

Be flexible

Plan as far in advance as you can, but be ready to adjust your thinking and budgets. It’s not until the two businesses actually start working together that you will know exactly how things will work out and how much budget will be needed to put plans into action.

Expect a period of integration

Successful acquisitions do not take place over night. It takes time to integrate logistics, business plans, strategy, brands, teams and budgets. Expect late nights, long hours and tight deadlines!

>Related: Why integration is key to a successful acquisition

Typically this will take three to six months at least, so be prepared to take a step back and learn what the other company has to offer – how to make the most of new people on the team, how they work best and above all else what the two teams can learn from each other.

There’s a reason you entered into the acquisition and the joining of two companies means a new team of ideas, experience and outlooks. Agreeing on a single, successful approach will not be easy but it will save a huge amount of time and energy if you get this right from the beginning.

Tomer Guriel is co-founder and CEO of Everline and ezbob, which together form the UK’s biggest e-lender

Further reading: Five common growing pains for small businesses

Praseeda Nair

Praseeda Nair

Praseeda was Editor for from 2016 to 2018.

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