Acquisitions, Mergers, Closures, Business Relocation

It is often said that 1 in 10 acquisitions or mergers end in failure, or that promised benefits never materialise. There are many possible causes:

 - Difficulty choosing a suitable target that is the right 'fit', and can be purchased at the right price and time;

 - Many companies tend to overvalue other businesses, and pay a price inconsistent with a realistic chance of making the planned return;

 - It is always tempting to ‘Do a Deal’.

Even merging two sites within the same Group can be disastrous. Plant closures are potentially problematical for obvious reasons, particularly when work or equipment is being transferred elsewhere.

Seemingly similar companies might have very different ways of working, and the classic 'two plus two equals five' outcome ends up nearer four, or even three, with inevitable disruption, resultant lost business, and eventually a distracted Management Team. 

There are many factors to take into account, some obvious, others not.

We can:

 - Provide an informed second opinion;

 - Give temporary assistance with necessary analysis and planning;

 - Assist managing people, systems, customers, technology differences, etc.

 - Take managerial responsibility for physical moves;

 - Devise contingency plans.

Plant closures are potentially problematical for obvious reasons particularly when work or equipment is being transferred elsewhere, and is protracted by necessity. Bought in experience in handling this type of task can be very helpful, in devising contingency plans for possible problems, or taking overall managerial responsibility for a merger or closure.

Examples of Assignments

Commercial Investment Group

Surveying potential acquisitions in the SME sector and acting as company doctor. Established a regional database and identified potential investment opportunities by completing comprehensive business reviews and making recommendations. Two companies subsequently purchased in the NW.

Building Products Group 

Project to turn around and merge a quality architectural hardware business T/O £12M with its sister company involving product range rationalisation, downsizing and plant closure. Significant improvements in delivery performance, profitability and reductions in WIP achieved.

Electrical Engineering

Consolidation of Danish business, setting up production line for acquired product range in UK plant.

Automotive rubber and plastic products

1st tier automotive manufacturing facility, in the process of being relocated into Eastern Europe. Overdue orders (£800K) virtually eliminated by increased output and control. Stock built to facilitate move. Terminal bonus scheme negotiated. (See ‘The Interim’ Issue No.8 – bottom of page 2).