GUIDE

Would a strategic acquirer ever keep my business and brand separate post-acquisition?

We work with a lot of businesses that are ultimately acquired by a strategic buyer.

A key consideration for a seller, particularly owner-managers, is how the business will be integrated with the acquirer, which includes both how the business operations are integrated, as well as the brand.

As always, the rationale for the transaction, as well as the business model of the acquirer and business being acquired, will be a big deciding factor on how the business is integrated operationally and from a brand perspective.

How might this play out? 

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Discuss how the acquired business will be integrated post-acquisition as the process develops.

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How can we help?

As with all transactions involving a strategic buyer, how an acquired business will be integrated post-acquisition will differ case by case. It is important that this is discussed as the process develops, especially if it is important to the seller.

Full integration

On one end of the spectrum, some strategic buyers are focused on fully integrating new acquisitions, both operationally and from a brand perspective. One reason for this is they will seek to realise both the revenue and cost synergies they believe will come from being part of a larger, fully integrated business.

This may result in operational parts of the business being combined (such as finance or HR), to integrating sales, product or technical teams. It may also be the focus of the acquiring group to fully integrate and have a central control function.

This will often be matched by integrating the branding in some form, either completely bringing it under the parent umbrella, or with a prefix or suffix linking to the parent group.

Portfolio-type approach

At the other end of the spectrum, a business may seek to leave a high level of autonomy with the acquired business. This may be the when the acquired business is distinct from the parent or rest of the group, or for operational reasons.

Equally, some strategic buyers are focused on acquiring new divisions and have a portfolio approach to how they manage these. In this case, their preference may be to keep divisions distinct.

In these examples, the acquiring business may not seek to change the brand of the acquired group, which optically keeps the business separate.

With regards to brand integration in particular, an acquiring business may seek to retain the acquired brand if it has a strong reputation with customers or a particular market. This may be especially relevant if a business is strong in a particular geography, region or sector.

 

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Knowledge

We don't hide behind jargon and complexity. Instead, we aim to open up the black box of M&A, illuminating the path with clear insight, simplifying the process, and delivering valuable information.