Managing mergers and acquisitions and avoiding disappointments

Source: Exec Digital USA

Date :04/01/2008 05:03:08

Having gone through multiple corporate acquisitions, merger consultant Robert Sher talks to Exec about managing mergers and acquisitions and why “no deal is a small deal.”

There is an old saying that, “The Third Time is the Charm.”

And for corporate CEO and business consultant Robert Sher, that adage certainly holds some degree of truth.

President of CEOtoCEO, in Dublin, Calif., Sher has become a bit of an expert on the topic of managing mergers and acquisitions — including how to avoid disappointments, such as the one he experienced with his fourth company purchase.

“I’m not an authority in the sense that I have brokered millions of dollars worth of deals,” Sher notes. “But I have personally been through the process four times.”

For a number of years, Sher ran a successful wholesale art company, serving a number of national retailers in Canada and the United States. Most active in the Toronto area, Sher includes Target Stores among his top clients.

Sher grew the business to become one of the top niche artwork distributors, but there were a number of art styles and artists not represented in the company’s portfolio.

“We handled quaint, middle America style artwork,” Sher says. “The demographic that would buy art by Thomas Kinkade would buy ours.”

Moving on up

That worked out just fine for a few years, Sher says, but eventually he wanted to take the company to the next level — and be not just a niche player, but a market powerhouse.

The problem: “we didn’t know the other styles well ourselves. If we wanted to be an industry leader, we needed to diversify.”

The first step, Sher says, was to get a better handle on what the competition was offering. And that led to an adviser recommending that he meet with the female owner of a particular art line that might be a nice complement to what Sher was handling.

To hear Sher describe the experience that led to his first acquisition, one would think he was discussing a blind date.

“I called her. We arranged to meet. We chatted a bit. It wasn’t terribly comfortable,” Sher says.

But then, like an almost-forgotten first date that apparently went better than you thought, “three months later, she called,” Sher says.

That call soon led to another meeting, and then a more serious relationship, in which Sher soon popped the question - and asked them other company owner if she would consent to join forces. She did, she sold her company to Sher, and she signed-on as an executive with Sher’s now-larger company.

What Sher says he quickly learned from the experience is that, despite the temptation to think otherwise, corporate CEOs are very approachable to discuss company mergers and sales, as long as they trust the people approaching them.

“CEOs are just as shy, on average, as the rest of us,” Sher says. “But if you’ve talked a bit, even just a few words, you can pick…

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