Communication is everything
We're in the business of communication, so it seemed natural that the communications that took place during our acquisition would help to shape the deal, prepare our employees and confirm that we were doing the right thing.
In late August of last year, we received our first exploratory visit from someone at MDC Partners, the parent company of Source Marketing, the agency that would ultimately acquire us. Almost immediately following the meeting, I met with my employees to tell them about it.
That might seem premature to many agency owners, but I've spent time as an employee in other companies wondering what all of the "secret" meetings were about in the company board room. I've also had friends who found out their company had been acquired when their boss tossed a new employee manual on their desks. Sharing of information is key to our company's culture, and a possible acquisition would be no exception to the rule. What did I have to lose by sharing?
That first employee meeting was a little weird, and I don't think I realized the seriousness of the situation until the words were coming out of my mouth: "There may be some interest in acquiring our agency..." Lots of discussion followed, and together we chatted about the possibilities, why we might consider a deal, and what it might mean to each of us personally, as well as the agency.
In the months that followed, a second holding company came to the table, the deal became even more interesting, and I continued to keep my crew in the loop. I've learned that what frustrates employees more than anything are the things that are out of their control. By keeping them in the loop, they had input to the situation, got answers to their questions, and ultimately helped shape the deal.
Dating before marriage
We learned a lot about the acquisition process, but nothing was more important than learning about the possible suitors who where expressing interest in our firm. An acquisition is permanent. You can fire a client who turns bad, or let go of an employee or vendor who turns out to be a mismatch for your firm. But if we were acquired by an agency that was a bad fit, our firm would be forever changed. That put a lot of pressure on ensuring that our suitors were appropriate and that the deal was right for us. We visited their offices, met with key members of their teams, and even did some work together. Dating made it easier to get married, because we knew exactly what we were getting into beforehand. Dating allowed employees to get a picture of what their lives might be like post-acquisition. Dating was a warm-up to the real thing.
As the deal progressed, I shared news each and every week with our crew. At the beginning of our weekly production meeting, I gave an update on any new developments. I did my best to ensure that the entire team was always on the same page, and up to date with the process. At the end of each meeting I'd ask the question: "Any new concerns or thoughts about our acquisition?" Keeping our people up to date helped alleviate concerns on their side, and getting regular employee input allowed me to craft the most appropriate deal for our firm.
Time is your friend
You already know that it takes more time to close a deal on a seven figure client than it does a $10,000 project. I have a short attention span and tend to get inpatient, and so, wanted to move things along quickly. A consultant that we hired to help us navigate the acquisition reminded me to let the deal take its course. There was no need to rush this, and time would allow us to learn more about our new potential parents. We had our first exploratory meeting with MDC Partners at the end of August 2009. Our first meeting with suitor No. 2 was in November 2009. We closed our deal in March of 2010. That's about six months of planning, chatting and getting to know our suitors. Every deal has its rhythm and flow, and an acquisition is no different. Going with the flow allowed us to get even more comfortable with the decision to sell.
Just as every acquisition has its own rhythm, every deal also has a personality. Having multiple agencies at the table gave us some good comparisons that might not have been possible with a single suitor. I learned that not every agency approaches acquisition in the same manner, and that every deal was indeed different. The number of people involved, the speed at which decisions were made, the confidence in the way information was shared were all reflective of what life might be like working under the umbrella of these agencies. I was impressed that every conversation with Source Marketing CEO Derek Correia was filled with laughter. Many clients hire agencies because they enjoy the people they'll be working with, and likewise, Derek's sense of humor helped confirm that our cultures would be a great match.
So our team was on board, our suitors were ready for action, and now we only needed to craft the perfect deal...
Next post: making the deal.
|ABOUT THE AUTHOR|
Darryl Ohrt is a former punk rocker and chief contributor to the greatest blog in all of the land, BrandFlakesForBreakfast. While his official title is president, his business card says he's "Prime Minister of Awesome" at Humongo (formerly known as Plaid). Darryl knows just enough to be dangerous. He's on the internet right now, playing, investigating and exploring. Watch out.