Creating a Tailored Acquisition & Integration Strategy
MVF, a global customer generation firm based in London, has made several acquisitions over the past twelve months – including Startups.co.uk, the UK’s number one website for entrepreneurs, startups and small business and Tech.co, a US based tech news and resources site.
General Counsel and Director of Corporate Development Tom Worner talks us through how the customer generation company has built a tailored M&A strategy to streamline the acquisition and integration of digital assets.
As a global online publisher creating content across several key business to business and business to consumer sectors, MVF has plans to further expand our reach and widen our audience. One of the best ways we can do this is via the acquisition of established websites.
With strong domain authorities, established brands and highly engaged audiences, these sites offer MVF new opportunities to connect our clients with ready-to-buy customers looking for their products through the delivery of high quality editorial content and useful resources. However, these types of assets can be challenging to acquire and integrate.
Websites like these have usually been built up by founders whose passion and personality is often stamped across every element of the business. They are run by small, highly skilled teams and have a loyal subscriber base.
Aside from the common challenges of communication, retention and culture, integrating businesses like these involves creating a partnership with the vendor to guide them through the process, retaining the existing ‘essence’ of the sites brand and identifying ways to add value without diminishing user engagement.
In recognition of these unique challenges, MVF has developed a proprietary approach to acquisitions by making the process seamless for founder sellers, based around three key pillars – understanding, transparency and communication.
Understanding the Vendor
Once we realised that the majority of vendors we would be working with would be entrepreneurs selling their business, and that it might be the first time they’ve been involved in the sale of a business, we sought to understand how we could best guide them through the M&A process.
Building a successful M&A strategy should be no different to any business strategy – you need to have a keen understanding of all key stakeholders involved and their motivations. From there, you can assess how you can tailor your approach to add value and make the acquisition process smooth.
Our legel team assumes a really wide remit, project managing entire transactions from beginning to end, and taking responsibility for all aspects of deals, not only the legals. We’re responsible for all due diligence relating to the acquisition, including financial, commercial, legal, technology and people.
This internal ownership gives our approach a personal, consistent approach, as we are the key link between the vendor and MVF’s leadership team.
Feedback from vendors we’ve worked with has validated our approach, with business owners describing our approach as friendly, pragmatic and upfront.
Generally an acquisition may prove disruptive for a company, but in the year following this acquisition MVF has maintained its culture (ranking #2 on the 2018 Best Companies to Work For List) and growth (ranking on the 2018 Inc 5000 Europe list).
We have a very strong company culture and core values system which all employees follow. As such, we expect all team members who join our company via acquisition to also embody these values and embrace our culture.
To make this easier, we aim to target businesses that already have a similar values system. This means that employees will find the transition to MVF much easier, and improves the likelihood of long term retention.
During the acquisition process, team members are treated similar to new starters would be. They are given a presentation about MVF, our history and our values by MVF’s President, Titus Sharpe, which is similar to the Vision and Values presentation Titus runs for all new starters to the business.
Finally, we put a strong emphasis on communication. We aim to be upfront and transparent about the expectations we have for new team members; from where they will be based, the future of their teams and any changes that might be made to their business model. Through genuine engagement with new team members, we are able to build strong connections so we are all working together towards the same goals.
Communicating ‘Business As Usual’
A common phrase in any acquisition is ‘business as usual’. This can mean different things to different people, and the simple fact is, under most acquisitions business will be anything but usual – there is a whole new company to get to know.
It’s important to have cohesion through the targeting, acquisition and integration process so that everyone involved is aware of what made the business an attractive target in the first place. This will ensure the right aspects of a business continue on ‘as usual’ while integration teams look for synergies.
For example, collectively, Startups’ editorial team has over 25 years’ journalism experience, as well as a host of accolades and achievements. MVF not only wanted to retain the existing team but to invest in it, too.
We made it clear that we recognised the value of our site to start-ups and small businesses and loved what the Startups brand stood for, but further to that, we made sure that everyone involved in the acquisition and integration process knew maintaining this was one of our biggest priorities.
As a result, the Startups team has been in a position to share their expertise to help shape MVF’s existing editorial teams while operating autonomously on growing their own brand. While the editorial side of the business continues to flourish, MVF’s digital marketing teams have been able to add value through the application of our lead generation model.
MVF recently celebrated the one year anniversary of our acquisition of Startups.co.uk, and in honour of the milestone, Startups Projects Editor Megan Dunsby penned an article describing life after acquisition for her and her Startups colleagues. Megan’s perspective is further validation of the effectiveness of an M&A strategy based on understanding, transparency and communication.