Mergers and Acquisitions…

This Month’s Water Cooler topic from the @TomorrowsFM team…

According to analysis by business advisers, Grant Thornton UK LLP, the value of FM merger and acquisition deals in 2012 increased four-fold on 2011 figures.

With more companies coming under the same directorship, do services always improve and what impact is  felt by existing clients of the acquired company?

For me, this issue depends on how well the companies have been joined together from a cultural point of view. This has both strategic and operational elements to it. The whole piece centres around change management and the perception of the change which has to be created, managed, explained and implemented in the minds of the employees.

It makes sense that a security company, who for example, don’t specialise in cleaning, merge with a cleaning specialist to expand their service offering, will be more successful when it comes to being able to tick extra boxes in a tender process or procurement exercise they go through for a bundled contract.

However, the measure of how well any merger or acquisition is managed will be determined by client perception. Are the two companies working as one company? Are the engineers and staff communicating to enable the contract to run smoothly and issues be addressed?

From a strategic level, the success of any merger will be determined by the alignment of policies and procedures and the alignment of these to the overarching mission statement to which the company now aspires. The agreement of achievable KPI’s will, for the foreseeable future, continue to be the agreed measure of key deliverables between client and contractor, so maybe more effort needs to be put on accurate agreement, drafting and measurement of these?

Clearly the most sought after growth is organic; on paper however, mergers and acquisitions should yield great thingsbecause, if it’s a strategic acquisition, additional specialist skills should be added to the company service portfolio. I suspect however that successful integration, is much more of an elusive beast and certainly takes time to bed in and become fully established, so that it begins to add real value. Furthermore, in time, we may see more innovation in the industry as a result of the mergers and acquisitions over the past 5 years, which can only be a good thing.

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