The Softer Side of Acquisition

By Gary A. Penrod, CBSE

Those that have participated in the acquisition process as a buyer or a seller know that it requires painstaking analysis, crunching numbers, and answering a plethora of “what ifs.” Getting it right can have a huge long-term positive effect; getting it wrong can be disappointing, with a long-term negative effect. Consequently, the process takes time, with each party working in good faith. My experience is that the entire process—from its beginning to the transaction’s close—often takes eight or nine months. 

Any acquisition has some risks. Mitigating risk takes time, insight, and dedication to the task at hand. Expert legal and financial professionals as well as merger and acquisitions specialists will be part of the process. It is necessary for all these professionals to communicate amongst themselves. 

Then there is the softer side of the acquisition process. Some may think of it as the human side of acquisition. 

Companies are comprised of people. Interaction among people, even when there is a common goal, can sometimes be taxing; especially when the interaction’s purpose is the acquisition of one company or group by another. Mutual trust is important throughout the process. At some point there may be some turmoil; which—while troubling if it goes too far—is understandable. 

Sometimes, the pace can be a little too fast, and one of the principals will delay matters to gain confidence that the process is proceeding well and to review matters that have been discussed. If necessary, the parties may agree to a short-term pause, rebooting the process. 

Acquisition is serious business, requiring professionalism, competency, and dedication to a single purpose. Mutual respect, candor, and understanding between the principal groups are all vital for success. Feeling comfortable with others involved in the process can make the difference between success and failure. 

One can always walk away from or pause the process at any point if it does not feel right. My experience is that attention to both the analytical and softer side of the acquisition process is important to achieve a mutually successful transaction, and one that when viewed in retrospect, still feels right. 

Gary Penrod is a long-time industry leader, author and speaker, having founded and operated a successful service company. After that company’s divestiture, he founded Gary Penrod and Associates, Inc (GPA), an industry-specific M&A intermediary group, having exclusive focus in the building services industry. GPA continues to serve the industry, having assisted many firms with their divestiture process in the USA, Canada and The Caribbean. Penrod is a former BSCAI Board Member and President.