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Mergers and acquisitions: how two brands become one

Posted 10th February 2022
By Vida Barr-Jones

At Focus7, we understand the importance of igniting your brand through strategy and how fundamental that is for a successful merger and acquisition. Mergers and Acquisitions (M&A) can be a real game changer for a business, but it’s important to have a well-planned, strong rebranding strategy from the get-go.

With the right planning and branding process in place, you can give your business endeavor the best chance of success. By taking the time to develop a clear brand strategy and communicate it to all stakeholders, you minimise confusion and maximise the chances of a smooth and profitable integration.

This short blog is a simple overview of the developments in the M&A space.

There isn’t a better time

2022 is part of an exciting new post-pandemic economic phase creating a surge in mergers and acquisitions, ideal for businesses that want to grow, expand and collaborate. The concept behind a M&A is simple:

One business acquires another, merging together to create a higher value business to fast-track growth.

There are multiple benefits of merging two businesses together, the most obvious is creating a higher value business than either company would have on its own. However, it’s not just about gains on the balance sheet motivating an acquirer; they also want to combine resources and make both companies more efficient so as to increase their chances of establishing themselves as leaders in their industry or market, in today’s competitive world. 

The 7th wave is here!

With the pandemic low, there is a lot of bargain capital readily available, among a backdrop of unprecedented opportunity to merge companies. Growth is starting to spiral as it underpins what business analysts are describing as the seventh great mergers & acquisitions wave in modern history. Companies – which have survived COVID-19 disruption – across all industries can and are beginning to take advantage of this.

Gigantic amounts of funding have become available from the UK government, encouraging businesses to acquire other businesses while focusing on ESG (Environment, Social and Governance).

Fraught with risks

Harvard Business Review explains that most mergers and acquisitions fail, destroying shareholder value at a cost to companies that easily goes into the billions. It seems obvious to say ‘make sure the M&A is successful’ but unfortunately most businesses won’t succeed, a prime factor being their inexperience.

These are just five of the many risks that should be considered:

  1. Strategy-led partnerships: If the professionals responsible lose sight of the financial aspects of the fusion, it can quickly go awry.
  2. Cultural incompatibility: Some businesses just cannot blend, often for more qualitative reasons – perhaps their brand values just don’t align, or one is waterfall and the other agile, or one has more global goals while the other is about local market saturation? Whatever they are, these kinds of factors could be extremely out of sync and this could spell disaster. 
  3. Using Investment banks for valuation: There can be underlying motives that are potentially malicious, any of the actors involved in a deal can be concealing certain important facts or misrepresentations either side of the merger. All of this takes considerable due diligence to investigate. 
  4. Insufficient Integration: If a merger is only in writing and doesn’t carry through to the business, this can also foretell trouble. If businesses aren’t internally aligned, the direction of both parts of the new business can be oppositional – essentially pulling apart the new brand.

Slow activity with poor communication: This is self-explanatory. Not making the moves mean the businesses can remain in a silo despite being combined in legal terms.

Brand alignment will improve the chances of success

To ensure that your brand is attracting the right audience, you need to understand what customers’ expectations are and make sure they’re met. Having the right audience, the sort that become ‘grade A’ clients – loving what you do, buying into your vision and advocating the use of your offering will make your brand or brands. 

Brand alignment refers to whether the two sides of the business match up well and work together. It can make or break the merger. It should be common sense, but so many of these ‘forged’ entities forget to stop, check alignment and make the necessary changes or take the right steps. When it comes to creating the new brand, that’s where our Focus7 team excels.

SMEs are being encouraged by the government to invest in digital especially in the context of the boom. Over the past six months businesses have come to Focus7 because they have either got funding for their acquisitions at negligible interest rates, or are able to receive grants to acquire. 

Along with this is the general recognition that manufacturing has been neglected for too long in this country. Hence a national programme encouraging and stimulating its growth. We’ve recently been working with local businesses that have come to us through the “Manufacturing Growth Programme” sponsored by HM Government

Now is the time to plan, prepare and take action.

It’s such an exciting time for businesses in the UK thanks to the Manufacturing Growth Programme and the seventh wave of funding finances. Whether you are already on a M&A journey or not quite there yet, it’s so important to not fall victim to a failed M&A.

If you’re considering a M&A or have already started the process and need help with rebranding, please do get in touch. We would love to support you through your journey.

CEO at Focus7

With passion and professionalism in abundance, Vida Barr-Jones has an impressive track record of establishing and meeting business goals. Vida brings 34 years of commercial experience, having spent eleven years as a Board Director at Europe’s largest FTSE-listed office products wholesaler. Vida is an inspirational leader known for excellent communication and engagement across all levels.

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