A merger is a tried and tested route to gaining scale quickly but, as the coalition government has shown, it’s not always easy to make sure that everyone involved knows what is expected of them and are singing from the same hymn sheet.

Previous experience is a definite advantage when it comes to buying a company. Natalie Balderson is the head of the portfolio department at the Skipton Building Society, which last May took over the Chesham Building Society. ‘We’d previously done a merger with the Scarborough Building society so we had recent relevant experience in how to go about it,’ says Balderson. ‘The basic element of the merger was strong communication between the two organisations, through project planning across all the departments, commitment from the people involved and clear direction as to what we wanted to achieve.’

Speed was also key. The actual merger occurred over one weekend including the migration of systems, staff and the changeover of the Chesham branches. Balderson explains that the tight deadline was due to the timescales Skipton had given to the FSA and Chesham’s customers.

Match-made in heaven

In September this year the online dating website EasyDate acquired the US site Cupid.com for $6.6 million (£4.4 million). EasyDate’s tactic to ensure a smooth integration of the new company was to effectively merge the businesses before the deal was finalised. EasyDate’s chief executive, Bill Dobbie, explains that prior to the merger EasyDate operated Cupid.com under licence. ‘The company was already integrated because we’d already taken over the management of the website, billing and customer services from January this year so the integration had already been done. ‘In the months leading up to the sale all we had to do was negotiate the price and the terms of the agreement.’

EasyDate operated Cupid.com in exchange for a royalty fee based on the number of visitors who came to the site. That revenue grew to £300,000 a month over the 8-month period. Dobbie comments: ‘An attraction of the acquisition was to secure the long term ownership of the revenues and profits worldwide. The US side of the business had been neglected over the past few years and had become a subsidiary of a group of jobs sites.’

A question of brand

Amicus Recruit and SocialWork 2000 are social work recruitment companies based across the South East, which announced their merger in September 2010. The latter was formed by ex-social worker and current managing director, James Brown, who has a distinct plan for the new entity.

‘We’re going to keep two brands separate and allow them to keep growing but under an umbrella brand, 3d Recruit. Operationally we’ll bring the two practicing standards together so that any candidate will get a similar service.’ The new board will comprise members of both companies, allowing them to jointly manage the staff of the two businesses. The facilities and databases of the two companies will also be shared to allow clients access to the services of both. Financial and IT integration are planned in the longer term.

Arnold isn’t looking to rush ahead with any major changes straight away: ‘The first six months is a time of assessment to get to know the other company and to take the best of what each has to offer.’

See also: Why integration is the key to a successful company acquisition

Mastering the obvious

It remains a rather daunting fact that the majority of acquisitions fail, mainly due to what appear to be glaringly basic common sense errors, such as lack of communication, poor focus, or no real planning about how the two companies are supposed to operate together. In February 2009 Gyro International merged with the US-based marketing agency HSR to form GyroHSR. The company’s chief operations officer, Richard Perry, says that making sure that everyone was actively involved in the merger was key to it’s success.

Perry comments: ‘We’re a fairly small company with around 600 employees so it’s pretty easy within that to identify the key stakeholders. We created an executive committee of representatives to work through different streams of the integration and had people who didn’t know each other and had never met before working on things like press, financing and streamlining job titles.’

The merger took place in one twelve-week stage but the financial integration is still being completed due to taxation differences in the countries the company is based in.  ‘We were both owned by the same private equity company which made a key difference in terms of the legality of the deal,’ says Perry. ‘The only difficulties were practical ones such as coordinating the necessary workflows and making sure they got thorough on time.’

Perry’s advice for companies approaching a merger is to lead openly and collaboratively because nothing can be left for misinterpretation. He adds: ‘Leave the politics and the egos at the door.’