A Quality Transaction Partner Might Be Right Under Your Nose

PSMJ Resources, Inc.
Posted on: 07/23/15
Written by: PSMJ Resources, Inc.

Social_Media_Image_Templates_-_Rectangular_Designs-24-234700-editedSo many firm leaders, both prospective buyers and prospective sellers, voice frustrations with finding quality firms that would be candidates for a prospective transaction. Some frequent sentiments are along the lines of “None of the good ones are interested in talking” or “They all want too much money.”

Well, the truth is that great merger or acquisition partners don’t often fall in your lap. But, the good news is that finding quality merger or acquisition partners can often be a whole lot easier than it may appear.

Consider the merger of E/A firm I&S Group (Mankato, MN) and civil engineering firm Kuehl & Payer (Storm Lake, IA). These two firms came into transaction discussions not by one knocking on the other’s door and simply asking to dance. Rather, it was a process that inherently got them off on the right foot.

As Chad Surprenant, President and CEO of I&S Group puts it “We had long wanted to expand our geographic service area and, specifically, to get to a certain area. In the meantime, we were aware of Kuehl & Payer, and knowing that we were not direct competitors (our geographies somewhat touched but did no overlap), we had contacted them in somewhat of a peer review scenario where we could ask them operational questions, learn of shared opportunities, and simply learn from each other.”

This initial discussion to compare notes then turned into something good. According to Surprenant, “As we talked about our vision of expansion, they were compelled by it and asked if we would consider merging them in as opposed to us leap frogging them or competing against them. We have long been admirers of their work in their specialty areas, but we also knew that we had services and vision from which they could benefit.” 

If you are spinning your wheels in finding quality merger or acquisition partners, don’t get the cart before the horse by seeking a firm that will immediately engage in transaction discussions and then putting on the hard sell. That can frequently be a turn-off for many successful firms. Instead, always keep the golden rule in mind and you just might find a successful transaction to be closer than you thought.

What are your firm's M&A plans? PSMJ is currently conducting a study on M&A trends, and will release the complimentary report in late August.

 

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