How Would You Prepare For A Merger Or Acquisition?

Posted by Ray Kieser, Agency Practice Director on December 4, 2015

How Would You Prepare For A Merger Or Acquisition?

Are You Ready For A Merger Or Acquisition?

Recent research from Admedia Partners and Deloitte explores mergers and acquisitions (M&A) within the creative agency sector over the past year and reveals its impact. M&A activity is on the increase and agencies are either looking to unlock maximum value when selling or grow their market share by acquiring new skills and specialisms.

A merger or acquisition can be a great way for an agency to expand its services, win new clients and enter new markets. But it can have a huge impact on clients and employees, so the whole process requires careful consideration.

The Proof Is In The Pudding

Potential suitors may be attracted by an agency’s skills or specialisms - after all, when buying an agency, they are buying its talent. But a successful transaction will ultimately rely on accurate valuations and the ability to demonstrate the profitability of clients, projects and employees. Therefore it's good to know that talent can deliver the goods.

And while vendors want to unlock and realise maximum value from their agency, they must convince potential buyers to expect returns on their acquisitions. One way is to demonstrate they have efficient, profitable project planning resources, and management processes in place that are beyond the executive leadership.

Different valuation multipliers will apply, according to the type of agency being acquired and can be based on specific reports and financial accounts. Adopting integrated platforms to measure performance and provide transparency of agency-wide KPIs, costs and margins help prove valuations and show how competitive an agency will be.

What if you were looking to buy or sell an agency? How prepared do you think you are?

What if you’re looking to expand into the digital or data-driven marketplace? How accurate are agency valuations and what should you look out for?

Our eGuide — Preparing For A Merger Or Acquisition – What You Should Consider —explores recent M&A activity in more detail and how agencies are trying to maximise their value. It also looks at the impact it can have on clients and employees.

Join me and other professionals from the agency industry as we ask the question What if?