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Mergers and acquisitions: the emotional rollercoaster

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18th Apr 2008
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Anyone who has bought a house will understand how stressful and emotional the process can be. When you’re sitting there wondering if the solicitors and mortgage providers have managed to match up all the paperwork in time to exchange, it can feel as though nobody cares about the outcome. Roy Ashton, director at Titcheners, thinks clients feel the same way when they’re going through a merger or acquisition. Here he discusses the emotional rollercoaster and explains how the accountant can help ease the ups and downs.

When clients approach me to support them through a merger or acquisition, I make a point of clarifying the process and setting their expectations upfront. This is important because it enables them to anticipate twists and turns in the process and helps to reduce that feeling that they are not in control. Getting the best deal can be a time-consuming process, and – as with conveyancing – clients often don’t fully understand what’s involved in conducting the negotiations. It is a complex business, as I outlined in a previous article.

Merger and acquisition meetings typically start in the afternoon and run well into the night, often only finishing at three or four in the morning. For the client, it probably feels as though nobody is giving much thought to him or her, sitting on the edge of their seat, while the “suits” immerse themselves in the finer detail of the deal.

By the time a deal is struck, advisors to both parties are running on pure adrenalin and will be buzzing, especially if they have got the result they wanted. Meanwhile, the client typically ends up an exhausted wreck. I made the mistake of trying to discuss fees immediately after a deal had been closed some years ago, and the client almost had a breakdown. I now know that I need to discuss that issue upfront so the client knows what to expect once the ink is dry on the contract.

I didn’t appreciate quite what an emotional rollercoaster the process can be for the client, until I went through the experience myself when I acquired Titcheners in 2002 with my business partner. The highs and lows are incredible – one minute you’ve got the deal, the next moment you’ve lost it. It’s an ordeal, but you are acting for yourself so there’s no third party involved to help make the decisions, it is purely down to you. While it is quite liberating, it is also a big responsibility. That said, it shouldn’t deter anyone from entering into merger and acquisition activities – since this first venture, I’ve overseen six other deals to date as part of Titcheners’ ambitious growth plans and I’m continuing to look for further opportunities.

As a third party conducting negotiations on behalf of a client, it’s fun. When you’re doing it for yourself, it can be absolutely horrendous. Yet, fundamentally, there is no difference between helping a client and going through a merger or acquisition yourself. The same rules apply, and you have to take a large dose of your own medicine to keep calm and stay on track to get the best outcome.

Since gaining personal experience going through my own acquisition, I’ve taken the time to empathise with my clients and prepare them in a way that I couldn’t do if I didn’t know what it was like on the other side of the table. I take them through the various scenarios in advance, ensuring they are prepared for all of the possible highs and lows. It enables them to be more involved in the negotiations and often results in a better deal.

It’s important that this is a two-way conversation and that business owners make the most of their accountant’s experience in these matters. They should not be afraid to ask questions of them to build confidence in their capabilities and allay concerns that they may have over the deal. A good accountant will be able to provide consultancy and act as a trusted partner throughout the process.

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