Page 24 - PWM2025_February Ebook

BETTER BUSINESS

In the pursuit

of expansion

A business can grow in one of several ways, chief of
which is expansion by acquisition or merger. Many
such transactions work out for the good. However,
a good number fail and do so miserably, by Adam
Bernstein disputes, regulatory scrutiny, or even
I thinks that one of the most effective
ndeed, M&A Community
wrote in April of this year financial liabilities for a buyer”. He
(2024) that around 90% fail.
ways to lower the risks is through
And it listed a number of high-
profile examples – AT&T and good due diligence.
Time Warner in 2018 at a
Collier says due diligence involves
value of $85bn, Microsoft and Nokia a comprehensive assessment of a
in 2014 at a value of $7.2bn, and business or its assets to establish
Daimler-Benz and Chrysler in 1998 value and uncover potential liabili-
valued at $36bn. ties; such investigations can cover
For the world of print, on a smaller commercial, financial and legal
scale, we can point to the businesses issues.
linked to Darren McMurray and the He says “The process typically
PFI Group. As Printweek noted in includes an in-depth review of finan-
May: “McMurray’s calamitous acqui- cial records, contracts, regulatory
sition spree has resulted in the failure compliance, and operational capabil-
of a raft of signage businesses, with ities. The scope of the exercise can
creditors left owed millions of vary based on the transaction’s She recommends “looking at financial health with a detailed review of
pounds.” nature, the size of the companies financial statements, liabilities, and cashflow. Then consider cultural com-
Then in October, Printweek wrote involved, and their respective sec- patibility and assess whether the two organisations’ cultures and manage-
of the sad closure of family-owned of tors.” ment styles align”.
Northwolds Richardson Group Of course, mergers can fail for Next, she would consider operational fit and in so doing, checking how
which went under as a result of the numerous reasons. Even so, Andrew well the systems, processes, and technology will integrate.
effects of Covid-19 and rising energy Brown, a partner in Corporate Allied to this is the necessary legal and regulatory compliance which, as
costs, despite the acquisition of a Commercial at Myerson, reckons she says, will “ensure that there are no hidden liabilities or compliance
local competitor to improve the over- that one of the top causes is a lack of issues”.
all order book. due diligence. Then she recommends looking at talent retention which means “identi-
He considers that “the mantra for
The causes of failure any buyer when it comes to acquiring fying key personnel and strategies to retain them post-merger”.
Robert Collier, a partner at VWV, another business is ‘buyer beware’”. Lastly, Summers would tackle strategic alignment to ensure that “the
knows that corporate transactions He says: “Without a full due dili- target aligns with long-term corporate strategy and will create meaningful
are often “inherently complex” and gence exercise, there is an obvious synergies”.
can involve “substantial financial and and significant risk the buyer’s vision Integration is the goal and on this Brown considers that the acquisition is
legal commitments for the buyer”. for the future of the target business very much a first step in the process. As he says: “An important part of mak-
He says that whether it’s a merger, may not be realisable due to issues it ing the acquisition a success is the process of integrating the target business
acquisition, or joint venture, “these has not been made aware of.” into the buyer’s existing operations. This may entail implementing practi-
deals can offer significant rewards Here Freya Summers, a partner in cal changes as well as making internal policies and procedures uniform
when executed properly”. However, the corporate department of Wright across the enlarged operation.” By this he means combining offices, bring-
he comments that “there are poten- Hassall, offers a potted guide as to ing in a new management team, integrating IT systems, financial/
tial pitfalls that could lead to costly what to look for before proceeding. accounts, HR, and terms of trade.

24 PrintWeek MENA February 2025 www.printweekmena.com