Mergers are risky, and the chance for failure is high: Two-thirds of corporate marriages fail to produce enough financial gains to justify their cost.
There’s some good advice from CNN Money on successful mergers today and it has quotes from Ceros CEO Simon Berg.
When I talked to Simon about acquiring Ceros in early 2012, he had already done four acquisitions himself. The one that worked out the best was the one where they aligned the companies in advance of the deal. Ones that didn’t go well hadn’t begun merging until the contract was signed.
So naturally, Simon moved from London to NYC in March and we worked together as if we were one big team long before our June deal.
From CNN Money:
1. Don’t rush into it. “A big reason why so many mergers don’t work is that top management on both sides plays its cards too close to the vest,” said Berg. “Without openness and honesty beforehand, you can easily end up merging with a company you really know nothing about.”
To prevent that, his top managers met with their Crowd Fusion counterparts for no-holds-barred discussions of their operations, hammering out plans and goals over nearly six months. “Done right, the due-diligence phase should be a lot like dating,” Berg said. “Get to know each other gradually.”
Berg said it’s also important to look beyond “getting the deal done,” and talk about what happens after. Before the two firms combined, “we made a list of objectives, including what we would do and when,” he said. “We were about 85% agreed on the essentials before we signed the papers.”
It’s an interesting article and surprising to me how many times the Crowd Fusion brand was mentioned. To me it feels like we’ve been Ceros for years now, like it was our destiny all along. I rarely tell our story from the Crowd Fusion perspective anymore.
Check out the rest of CNN Money’s smart tips for successful mergers.