They said it was a match made in heaven. Thats what the top executives of Extrel Corp. declared, word for word, to the world when they consummated a whirlwind merger with Boston-based Millipore a number of years ago.
The married parties hosted a press conference that seemed much like a celebratory wedding reception, but without the clinking glasses. Extrels executives gave warm speeches on how the deal benefited not only the shareholders, but the employees and the executives.
Millipore officials offered their own media sound bites. And the local venture capitalists who, years before, had invested millions of dollars in Extrel, exhaled a collective sigh of relief. They would finally get their investment return after years of building up this maker of mass spectrometry equipment.
What I remember most about this beloved occasion and this glowing new couple isnt the beauty of the deal or even the celebration that followed. Rather, it was the oh so short honeymoon.
Ill never forget the night, only weeks after the marriage, when I ran into Extrels president at the annual Entrepreneur Of The Year awards. He swaggered up to me, smiling and laughing with a nervousness clearly influenced by a sip or two of spirits. Then I spoke to him.
So, how is everything now that youre part of Millipore? I blurted.
Well..., he said.
You did alright for yourself, didnt you? I asked. You should still be celebrating.
He stopped in his tracks, shook his head and looked at me.
They fired me.
They fired him. In fact, Millipore officials abruptly fired the top three executives of Extrel in a move that went virtually unexplained. So much for their marriage made in heaven.
As the folks at Extrel learned the hard way, merging companies can prove a lot more complicated than it may seem at first glance. Sure, you may be merging to gain new products for a given market or a more expansive distribution network. You may even gain new clients, new talent and additional working capital.
But how much should each side benefit? And how do you get two corporate cultures that have developed their own working identities and ways of doing things to adopt one synergistic culture?
Strategic compromise, from whose name goes on the company door and who takes over the top ranks, to whose benefit plan to adopt and whose vision to follow, requires strong but giving spirits that can see the growth potential without losing the compassion to deal with diverse of employees. That takes extensive due diligence on both sides. And patience.
Hallmark/Tassone, the advertising agency featured in this months cover story, has faced all of that and then some in its quest for size, breadth and reach. Certainly, its principals experienced their share of pain, discouragement and obstacles along the merger trail. But they learned a lot along the way, such as dont marry for money; make sure the companies business philosophies mesh; and bring in outside help when necessary to smoothly merge corporate cultures in a way that keeps all employees interests at hand.
Among their most creative strategies: living together for a year to see how well they worked together before any official marriage. That alleviated undue surprises, and the two separate companies ultimately walked down the aisle together.
Was it a match made in heaven? The combined Hallmark/Tassone principals all still have their jobs and continue to press onward together, if thats any indication.
Thats more than I can say for the unfortunate Extrel executive. He took his company stock and his damaged pride and moved to Texas. And so it goes.
Daniel Bates (email@example.com) is editor of SBN.