Mergers & Acquisitions – What Types of Leaders do you Need to Succeed?

Mergers & Acquisitions – What Types of Leaders do you Need to Succeed?

The sale of parts of the nmcn business has added to the growing number of companies bolting on new divisions this year.

Keltbray, Galliford Try and Svella all bought business units of nmcn from the administrators Grant Thornton. Leading to the transfer of about 1,600 people into new organisations.

In very different circumstances, Geoffrey Osborne recently sold its Osborne Infrastructure division to private equity firm Sullivan Street. Which pledged to keep growing the business and support its existing management team.

M Group Services bought Skanska’s highways maintenance and street lighting division earlier this year, renaming it Milestone Infrastructure. Whilst German private equity outfit Aurelius acquired a majority stake in SSE Contracting.

This growing trend could be a result of construction companies deciding to focus on their core specialisms post-pandemic, to be more profitable in a smaller area of the market.

If this continues there are likely to be plenty of opportunities for ambitious businesses to pick up new divisions at competitive prices. Bolt-on acquisitions can be a quick and effective way to grow in a changing market. But there are plenty of pitfalls and no guarantee of success.

So, if you are looking to make an acquisition, what are the key people you need to ensure you get the right fit and manage the process correctly?

1. Strategy leader

Before you can make a successful acquisition, you need to find the right business to buy. This requires accurate and detailed strategic thinking. What are you trying to achieve? How will you best do that and what does it take to make it happen?

It is critical to have someone in a senior business development or strategy role who you can rely on to identify the right opportunities.

If you don’t immediately think of someone within your business, it might be time to recruit externally. It is tempting to look for a M&A specialist from the corporate finance world. But you may also want someone with practical experience of your industry.

Many successful acquisitions are led by an individual who has not just bought companies before but has overseen the integration of them as well. They will understand the difference between sales talk and reality, they can ask the pertinent questions at the right time. Are they also brave enough to advise you walk away from a deal if it doesn’t look right? This could be someone from a strategy-focused role or a Managing Director that has been through the M&A process before.

2. Turnaround leader

Bringing a large number of staff and assets into a new business doesn’t always run smoothly. Some things, possibly some people, might need to change. The first 12-18 months can be hard as everyone adapts to this.

You need to be confident that you have the right person to steer the acquired business through these choppy waters. Most likely an Operations Director, or a hands-on Managing Director. This individual needs to be resilient, focused and have change management skills. They may exist within your current structure or even as part of the management team you are bringing in. But they need to be clear on their mission and dedicated to taking the decisions necessary to fulfilling it.

If you need to bring in the skills externally then make sure you look for clear evidence at interview that candidates have overseen business transformations before.

3. People leader

Behind the operational team, you need a sharp HR team led by a Director who can manage the people side of a huge integration and change programme. From bringing in staff through the TUPE process to aligning pay and conditions with existing staff over time.

The incoming staff will need to be fully integrated into their new company and could be resistant to any changes which they perceive will impact them negatively.

Some changes may need to be made immediately and others are best done over time with lots of consultation. Treading this tightrope is not for the faint hearted. The HR leader can have as big a part to play in the success of an acquisition as any other role.

There is huge potential for dispute and aggravation when two businesses are combined. So, having a calm head in charge of the people aspects is vital.

As always, the key to making your business successful is having the right senior leaders in place.

If you’re considering acquiring a division to grow your business, or need professional advice on getting your recruitment strategy in place please do get in contact by clicking HERE.

Author: Jim Newsom

Jim Newsom

Managing Director