How do you decide if being acquired by another corporation is best for you, your business and your employees?
Fred Bidwell, president and CEO of Akron-based Malone Advertising, faced a tough decision last year when J. Walter Thompson (JWT), the largest advertising firm in the country, approached him about acquiring Malone.
“It’s important for any business, any entrepreneur who’s thinking about selling his or her company, to understand that the concept behind an acquisition may be simple, but the details of actually completing an acquisition are extremely complex,” Bidwell says. “I think you’ve got to approach something like this recognizing that ... there’s a strategic reason to come together. And I had to be convinced there was really something in it for the staff. Otherwise, there would be no reason to do it.”
Bidwell says every individual business owner has to weigh his or her own issues when it comes to an acquisition. What works for one company won’t necessarily benefit another.
“Every deal is different, and there are different financial reasons to do a deal,” he says. “There is no one-size-fits-all. You need to be convinced you are doing it for the right reasons.”
For Bidwell, he saw the prospect of working under JWT as a great opportunity. The companies share three clients, Kimberly-Clark, Pfizer and Nestle.
“The fact that we work together doing different things for those clients gave us an opportunity to get to know each other,” he says. “We do things that are different, but complimentary. In many ways, JWT has made changes to become more entrepreneurial, and as we’ve changed, we’ve made changes to become more strategic and professional. So we kind of met in the middle and found our styles were similar.”
Bidwell says one of the most important factors when considering an acquisition is whether the cultures of the companies are compatible. Both sides have to know how well they will work together.
JWT also did not want Malone to undergo any major changes. Its intention was not to bring its systems, styles and people to Akron for Malone to adopt.
“They saw what we do is different, and if they changed it, they would ruin what they bought,” says Bidwell. “That I think has made this offer different than other offers and discussions we’ve had with potential suitors. Their style is to leave their acquisitions alone and thrive as they are.”
A company’s current financial status and future projections also can play a major role in an acquisition offer.
“The fact that we were and are a strong company although we were the acquired company (meant) we were being acquired from a position of strength” Bidwell says. “And we were doing the deal for a strong strategic reason. I think that makes the whole process easier to do and easier to feel good about.”
Malone would still be a success whether the deal went through or not, a fact that made negotiations easier, he says.
Bidwell says surrounding yourself with an experienced legal and accounting team will help you make the right decision on whether to be acquired. He handpicked a team of people he trusted and whose abilities he felt confident in.
“The important thing to do is to recognize there is a lot of emotion involved,” he says. “You need very good advice.”
But ultimately, no one knows your business better than you.
HOW TO REACH: Malone Advertising, (330) 376-6148 or www.malonead.com