It may seem like the odds are stacked against you if 3 out of 4 acquisitions fail, but in this episode we take a closer look into acquiring for growth. With the help of Marc Johnstone of Shirlaws Group we look at the right growth path for your business so tune in to ensure you are the 1 in 4 that succeed.
- Identify the right growth path
- Failure versus success in acquisitions
- Why acquisitions should be something that businesses think about
- Know what’s happening in the industry
- Case study examples
- Contact Marc Johnstone
In this two-part series with Marc Johnstone of Shirlaws Group we discuss why it is that 3 out of 4 acquisitions fail. We identify the right growth plan, touch upon failure versus success in acquisitions and discuss why acquisitions should continue to be something businesses think about. Marc shares the importance of knowing what’s happening in the industry and provides case study examples for us to learn from.
Marc Johnstone – Shirlaws Group
Marc is one of the founders of Shirlaws Group, he pioneered the international expansion of Shirlaws by the founding of Shirlaws in the USA. During his 5 years as CEO the business experienced more than 100% year on year growth across 3 offices, 5 partners and 27 staff.
Connect with Marc
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Joanna: Hi, it’s Joanna Oakey here and you’re listening to The Deal Room podcast, a podcast proudly brought to you by our commercial legal practice Aspect Legal. Now today we have part one of a two-part series, all about acquisitions for growth. Now in this episode, we look at why you would bother acquiring for growth if three out of four acquisitions fail. And in the next episode, we’re going to be talking about a more positive light on acquisitions, how you make sure that your acquisition is the one out of four, that is a success. So today to talk about this we have onboard Marc Johnstone from Shirlaws Group. Marc is an absolute powerhouse of information and in this episode, we really drill into what it is that make acquisitions fail, and what the statistics as saying about it all, this is a fabulous episode. I hope You enjoy listening to it as much as I enjoyed recording it. Well, here we go with Marc.
Joanna: Marc, thank you for coming on to The Deal Room podcast again, it’s fabulous having you on for a second time.
Marc: My pleasure. And thank you again, Joyner and your team, and Good morning or good afternoon everyone depending on which part the day you are listening to this.
Joanna: That’s the beauty of podcasting could be any time all over the globe. Actually, interestingly, we do have random listeners from all over the world. So who knows where you are, but Good morning, afternoon to you.
Marc: It might be my second cousins somewhere around the world.
Identify the right growth path
Joanna: Now, Marc, I wanted to have you back on again because I really really enjoyed our first discussion which is in our show notes. I can’t even remember what the number wasn’t the podcast episode. So if you’re listening in now, make sure after you’ve listened to this episode, you go check out the show notes because we’ll be linking straight through to the other podcast that Marc and I chatted on but today we’re talking all about the concept of growth via acquisition. So acquisition as an alternative to organic growth. So Marc, why are we talking about this? And maybe just quickly for people who haven’t listened to the first episode or maybe have forgotten. How about you just give us a quick rundown of who you are in your background?
Marc: Yeah, look great. Thank you, Joanna. Okay, in our company, Shirlaws Group, we advise SMEs on how to grow their companies, either organically or via acquisition, because when you think of growth, your acquisition is one mode or one opportunity. But there are also other ways in which a company can grow its revenue and its share price and one of those is organic. So we work with SMEs and their advisors. So we work closely with their lawyers and their accountants and their financial advisors as well to actually identify what is the right growth path, you know, is it a combination of organic and acquisition, acquisition only or organic only. One of the first things we start with these is a statistic from the mid-market, which was a study McKinsey and Company did in the 1980s, which identified that 77% of mergers and acquisitions fail. So if we just start with why are you doing this? When three out of four deals don’t work. And it’s not because the McKinsey guys or you know, or the accountant or the business spreadsheets are wrong, you know, when you’re looking to merge two companies or one company to acquire a number.
Yeah, a lot of times right is correctly spent on doing the numbers to make sure you get the benefits of that. What the study found was the two main impediments to a successful acquisition were actually merging the cultures if two if one company acquires another, actually the cultural changes and paying attention to that because you know, obviously, the different cultures are the DNA of businesses they don’t typically show up in the spreadsheet. So paying attention to the culture is really important. And also the time. And it’s and that’s the time to have the deal work. Because if you don’t give an acquisition enough time to be successful, well, you don’t get the returns.
So if you’re looking for a 200% share price increase as a return, well, if that’s going to take three years, but you’ve only got the cash flow or the capital for 18 months to do it, well, the opportunity doesn’t get baked in enough. So the two main reasons were culture and time. But if we just step back from that and say, well, three out of four acquisitions or mergers don’t actually work. Why are we doing this and what are the other alternatives?
Failure versus success in acquisitions
Joanna: Before we look at that question, Can I just dig into what it means for an acquisition to not work in inverted commas or to fail because, you know, I hear lots of figures bandied about and I’m always interested in the concept of what does failure versus success mean. And I look at that, and I asked that because so many businesses we deal with initially might come in without a clear picture of what success or failure means at the end of the day as well. So you know, do you have any thoughts on that?
Marc: Yeah. Firstly, that’s, that’s a great question, Joanna, because it’s actually not particularly well articulated. So quite often, we’ll make one plus one equal four. So a company will acquire another company and those two entities you know, one thing one each will make one plus one equal four. But what we often see is that that one plus that one plus one only equals 1.2 because it takes too long to embed the turret staff turnover is a critical issue that leads to failure. You know, customers go away as well. So staff turnover happens customers leave because they don’t like the new acquiring entity etc. They may conflict.
So what people don’t articulate accurately is a success. They kind of have an idea of it. And it’s typically numbers based, but they don’t typically have, you know, KPIs around, no staff turnover, all the customer retention. But you know, to where your questions really prescient is they don’t actually don’t articulate failure well, which is, at what point will we know that this isn’t going to work? And what’s our plan B, what’s our parachute option if it doesn’t work? Because ultimately, without, you know, strong corporate governance, i.e. at the board level, but also at the advisory board level, and at the adviser level, we’re actually not introducing failure. So one of the things we’ll do with a client is actually talking about failure in advance of the deal happening, because it’s much easier to talk about, you know, the failure milestones of if we don’t get the returns at six months, or this point, we don’t get that milestone-based return. What is their plan B, what’s our parachute option to keep the business because ultimately, the key successful businesses to stay in business?
And if you’re at risk of failing, you know that means all the hard work from all the folks in the company comes to nothing. So it’s really important to articulate failure in advance because when you’re actually failing, it’s much harder to have a grounded station without the heat of. It’s like if you are on an airplane today, and the red light went off, you would hope your pilot is trained to respond a certain way. And I use that word respond because our pilot is trained to respond a certain way if something happens, it just like a surgeon. What we’re seeing is a red light goes off or something happens and we panic, we haven’t we react to it, we don’t respond in the right way, and say “Oh, this is going on”.
We didn’t anticipate this. And we, you know, we go into a frantic mode on what do we do and we typically you know, we use phrases like we’ll circle the wagons and all that corporate quote, it sort of bingo terminology that we call it, and what it just creates is that continued continuation of spinning of the wheels, actually articulating what failure looks like, critically is important, because when we can see those potential failures occurring, you know, in the next three to six months, we can actually take proactive actions to address those, we can typically, you know, maybe tap more capital get more debt, but once you know, six months down the track, and that red lights flashing really strongly, it’s hard to get investment, you know, you do what’s typically called a down round in Silicon Valley, which is you raise money at a value lower than you did last time where you raise money at a value lower than what you think the company’s worth, or you have to get debt and a much higher price so that you know, it’s a cup 200 300 basis points above us, you know, what you can afford and you know, we just think of Australia has just gone into recession this week. And back, you know, in 1990, the prime interest rate 21% what that meant is if you’re a company and you’ve got debt, you know, 25% of that was, you know that that was the interest rate.
So if your margin was 30%, as a company, you’re paying 25% of that first before you could run your business. So the impacts of that mean that we actually don’t an articulate failure. The other problem we have in Australia is, you know, in the United States, failure is seen as a badge of honor. It’s, you know, you learned your lessons on someone else’s dime, you showed resilience, you stayed in the game. So if you talk about a failure you had in a company or in your career that’s embraced, whereas in Australia, we have a cultural mindset of not articulating failure, not embracing it. So as a result, we’re less likely to discuss it because it’s viewed a certain way. And we also have the legal ramifications of you know, we don’t have chapter 11 in Australia. You know, there were fiduciary duties on the board and all those sorts of things. So, you know, in Australia, if you fail, you go bankrupt. And that’s that’s significant, you know, impact on your future career, your ability to start companies, whereas in the United States, you’ve got chapter 11 protection.
And the end, if you do proceed to bankruptcy, your administration, your ability to come back from that is not seven years. It’s for three years. And it’s not viewed as a, it’s not ideal. But as I said, it’s, it’s viewed as a positive in that you’ve tried something and you’ve embraced it. So we don’t have that cultural or legal sort of engagement around the concept of failure in Australia, which means we don’t talk about it, which means we’re much less likely to be able to predict to discuss it and therefore, rectify the situation. So yeah, your question around, you know, identifying failure milestones or failure points.
You know, is what One of the most important things, a business that’s looking to sell or a business that’s looking to acquire another one. And one of the things we talked to, when we talked to an acquiring company when we’re doing what’s called by side due diligence on the company they’re looking to acquire is we actually look for failures. Have they actually dealt with failures in their business? Or have they actually released a product four years ago, that didn’t get the returns and they nipped it in the bud after six months, because that was the agreed failure point. And they learned something from it, or they evolve their business model in Silicon Valley. They call it pivoting. And what it means is, you made a mistake and you learned something from it and you pivoted your business.
Joanna: Well, it’s a lot of people who are learning what pivot means right at the moment isn’t their Marc.
Marc: Pivots can become one of those corporate quote words as well. But ultimately, you know, those sorts of businesses because that, you know, in the United States and in Silicon Valley, because they’re venture capital-backed, there’s a much greater risk on the board because The VCs are used to dealing with the requirements to pivot things don’t work, etc. And it’s a big enough Marcet over there that you can, you know, evolve yourself so that that term, you know, that embracing of a failure, an acknowledgment. So what we look for when we’re doing due diligence is actually when did they fail? And how did they deal with it? If did they actually cut the product or the new office? So there’ll be things that were released a new product, or we opened a new office here, or we, you know, we tried something else, and we’ll actually say, well, in the strategic documents work, was there actually a conversation around as you rightly asked, What does failure look like?
Joanna: So few people talk about that. I just like a novel perspective, I absolutely love it. It’s a really interesting take on what you’re looking for in DD as well. You know, because quite often DD can look quite mechanical, but what we’re talking about here is digging further.
Marc: Also if you know if you’re the company looking to be acquired actually leading with that, but talking about that as well, because if the business is, you know, always said we’ve never made a mistake, or we’ve always been successful, you know, they’re either lucky or lying. Why are we investable? so if we’re looking to acquire a business, and they’ve said, you know, we’ve never made a mistake. Well, we don’t know if they’re resilient. We don’t know what’s going to happen if they do make a mistake, because the guarantees we all make mistakes in life.
If they misleading us, well, that’s obviously another you know, and what that leads to is also ego because if people say, we’ve never made a mistake, you know, maybe that indicates ego in the business or in the leadership team. And, again, that makes the business is less valuable, less likely to be resilient because in an ideal world, we want a successful company that you know, has fought of every five initiatives. They have four successes and one fails and they do with a failure.
They learn from But they evolve the business because, you know, innovation is in Silicon Valley where we spent where I spent quite a bit of time working with VCs, you know, innovation often, you know, is returned to failing fast and learning from. So, you know, what they’ll have is, you know, is, you know, series of breakdowns lead to a breakthrough. So, if you fail in certain things, it’s okay, how do we pivot out of that? So, in an SME, which is almost in the more static industry and more competitive forces, what we need to look for is, as I said, those you know, I’d much rather invest in a business that has four out of five successes deals with failure, than someone who said that never.
Why acquisitions should be something that businesses think about
Joanna: Maybe part of what is happening in that discussion as well. So if you’re about four out of five successes or whatever, and the one failure versus the none, perhaps what you’re looking at a business as well that have got more Marketing intelligence as well because they’ve been out there looking testing, understood around More information that is useful to an acquirer. And so let’s so coming full circle. So we’ve talked about this failure to identify what failure is. And part of that, I think is always a failure to properly identify what success looks like and, you know, success metrics, and maybe sometimes a failure to understand to properly understood what then what they’re actually seeking to do out of that. But let’s, we’ve talked about the numbers that fail. So why is it when there’s such a large potential of failing according to these studies, why is it that acquisition should still be something that businesses think about?
Marc: Yeah, well, if you think about it, you know, what we’re trying to do via acquisition is growing. So as I said, you know, in it In an ideal world, for us, it’s a combination of organic growth, which is how can we continue to, to create growth from our existing cash flow. And then also, you know, to acquire businesses that we can then, you know, have an advantage of so why it typically works is first, if the industry you’re in, has activity in it. So if you, if we go back to sort of, you know, that what I call the three lessons of acquiring, which is, you know, the three lessons of Silicon Valley, which is the first thing they look for is what’s happening in the industry, because 98.4% of returns come from the asset class, not the company. That’s, you know, that’s the first thing you learn in finance or corporate finance at university.
Because, you know, as an example, in Australia, recently, we had the mining boom for 10 years. So the worst miners still tripled their share price because iron and ore went through the roof. Whereas if you’ve run a newspaper for the last 20 years You haven’t moved to digital content, you’re still trying to print them. You know, deliver print newspapers on the web for a week. Doesn’t matter how good your business is your industry is in decline, which means there’s less value attached to the share price. So the golden rule is what’s happening in the industry because if the industry is in growth mode, that’s, that’s where the opportunities because the rising tide will lift all boats. So where acquisition can help is first, if that industry is in decline, well, that’s when private equity into your industry.
That is a sign to start looking at aggregation or growth fire acquisition because private equity is business models to create a return within a three-year time frame. And what they typically do is buy underperforming businesses or businesses that you know that the owners have what we call the second brick wall and they’re disillusioned and they look back at the good old days and say when we had half the staff and twice the money with 40 people in our office at French’s forest, we now have 120 people It’s book sale and we’re not making any money. So what private equity does is typical, you know, implement the private equity formula, which is to buy it, you know, pennies on the pound for you bring their guys into it, change the business around, restructure it, and then grow via acquisition.
So when private equity enters the industry you’re in. And you know, at the top of the segment, if you’re an SME a couple of segments down, then, you know, if we just look at every industry, for the accountants, you know, on the podcast today, you know, the tier one guys are KPMG, PwC, and Deloitte and then there are second-tier guys who are Crowe Horwath, etc, etc, and video segment. And you know, there’s nine of those around the world. And then there’s the third tier and the fourth tier. So as soon as acquisition comes up in those first two tiers, that means there’s going to be a ripple effect down to the third, fourth, and fifth tier.
So that’s where we talk. You know, you’re point on their comment before Joanna on knowing what’s happening in the industry. In Silicon Valley, they call it seeing around corners, which is actually spending time researching your industry, knowing what business you’re really in what they’re buying. So where acquisition can help is, you know when there’s acquisition in the layers above you in your industry, because ultimately someone is going to then look for growth via acquisition. And if you’re in a growth industry, the other time to really consider growth, fire acquisition is when your industry is growing quickly. So one of the things we talked about organic growth versus growth via acquisition is the first baseline is what’s the growth of your industry. And if the industry growth is 10%, then your performance should be adjusted against that. So if you’ve grown at 8%, you’ve actually underperformed the industry, you’ve grown to 20%, etc. So in our industry, which we’ve been in for 20 years, the business you know the SME coaching industry. Our industry grows at 25% and so our baseline is 20%. So for our first 10 years, we grew at 50% per annum, which meant we’re able to double the industry average. And we didn’t actually grow via acquisition, we grew organically. But if you were looking to take advantage of that industry, well, when the industry has high growth rates, sometimes you can’t keep up organically. So growing via acquisition, it’s like the arms race or it’s like a gold rush. You know, if they open up a bit of land where there’s gold, your job is to put as many stakes down as quickly as possible.
And you know, the property developers on the call will know you know, when you know, you get a slice of land rezoned. It’s, it’s a foot race to get as many as you can, and to use debt. So when the industry has high growth, that’s when you know growth via acquisition allows you to keep up and keep ahead of that. You can see that in all sorts of industries. You know, the time management industry at the moment there’s a company called Kronos out of the United States is backed by one of the large private equity firms globally. You can just go to their website, and they have said, our strategy for Kronos is to grow by acquisition. So we had a client who was two tiers below, Kronos, who is doing $30 million revenue at the time.
Know what’s happening in the industry
And we said, well, let’s position ourselves for acquisition. And we’re able to do some certain things. We grew the business to $25 million revenue organically, they were then able to raise $25 million at a $75 million valuation, which was three times revenue, and about 12 times profit, purely because the private equity firm had publicly stated on Kronos website, this is how we’ll tap out the organic growth via these strategies. And then in three years time, we’ll need to grow via acquisition. So just understanding is researching your industry understanding what’s happening around you and below you and on either side of you. looking at what’s happening with your competitors.
Joanna: We’ll come back to that in a second, the competitors, but one of the things we’re talking about here is the large SMEs. Let’s talk about the smaller SMEs. Let’s talk about an SME that maybe is one or 2 million turnovers, you know, what are these indicators of things for them as well. So, you know, at that size, they’re not necessarily looking at taking over the Marcet taking over the industry, but growth by acquisition can still be a really useful, useful and a quicker method of getting growth, then simply organic growth. What are your thoughts for them?
Case study examples
Marc: There’s probably there are two relevant case studies here. So we worked with a CBD CBD based accounting firm that was doing $1.5 million revenue. And we started, we started chatting to them in 2014. And they wanted to grow by acquisition. So they actually wanted to buy accounting firms to get a certain amount of revenue, because, at a $12 million revenue number that just changed the segment, you know that the segment of the Marcet they are in, and therefore the multiplier on their revenue will be worth more, and they could sell more products to their clients. And, importantly, this, the hundred percent, so, Tom was very entrepreneurial. So he did have an accounting degree, but he didn’t do any accounting work. And he employed really good accountants do that.
So he saw the business very entrepreneurially. And what we actually said to him was, well, we can actually get you to $3 million through organic growth, via redeploying your time differently as opposed to just acquiring and then trying to, you know, digest it. What are we get your two 3 million 1st organically, and then acquire smaller firms doing that 1.2 and showing them how to get to first of all, we didn’t get what we talked to our clients about is do you have a portfolio mindset? If you’re looking to grow, your firm by acquisition will firstly optimize it first to its maximum level and then use that formula to buy other businesses.
Because if two $1.2 million firms merge, to create a $2.4 million firm, there’s no uplift there. It’s a lot of work for doubling. But ultimately, if you’re at 60% efficiency, and they’re at 60% efficiency, as soon as you merge, you’re at 36%, point six times point six, which is why 77% of them fail, because takes too long to integrate. Whereas if you optimize your business to three, and then bring 4 $1.2 million firms into the mix, well, all of a sudden, you’ve got $8 million of revenue to play with and I use the wordplay within a deliberate way, because then it gives you enough upside to give you the time to bake in the integration of those other firms.
So when you think about growing, it’s about saying, well, let’s get ourselves big enough point where we can still be the major player or have control or be the dominant force, but also have enough because the problem with just acquiring one firm is, it’s like, if you have only had one person to your sales team, and there’s, you know, there are only two people in your team, you add one, if he or she fails, the cost of training, etc, etc, you’re at risk. Whereas if you hire four salespeople on commission, and two of them work, well, you’ll get the uplift and you’ll get another million dollars in revenue. So it’s the same when acquiring a firm, those four businesses doing 1.2 million eight if two of them work and we get them to three.
Well, we’ve got a successful transaction and a successful acquisition strategy. If we don’t have enough, because two might fail. You know, that’s why we need to get coverage into de-risk it so and managing the acquisition of four firms is almost the same amount of work as managing the acquisition of one or two. It’s the same with restaurant formulas one restaurant for restaurants. So 12 you make money with two or three restaurants, you lose money because you’ve got too much, you know, running around doing everything and not enough revenue. So when looking to grow via acquisition, often we sit there and say, well, let’s optimize it first, get big enough and then bring smaller businesses in where they can actually see that was because that acquiring Business Studies at 1.2.
If you can show them how to get to 2.4, well, there’s enough share price growth for all the participants, as opposed to you know, because one of the risks when acquiring these, the company you’re acquiring, you know, the cultural view is often more “we’re now acquiring you so it’s my way or the highway”, which is which ultimately leads to mistakes. As another example, at the other end, an old client of ours, that’s an accounting firm merged with another accounting firm, they were both for million-dollar firms at the time. One of the owners of retired and the same thing had happened with the other firm, there were two owners and one had retired. So the two residual owners of each firm sat down and said, Okay, well, let’s merge together. And they were both in the local Marcet on the Northern Beaches of Sydney. And they actually designed a three-year integration strategy. And I said to all their employees and all their clients, this is going to take three years to integrate. And what that did was it took the pressure off everything.
Joanna: That’s fascinating. Not many people were willing to take that amount of time, right?
Marc: That’s the key thing. That’s why you know, only one in four are successful because you’ve actually got to deal with the reality of the situation, which is there’s the cultural integration. It’s just like building a house or building a road, you know, things take twice as long and cost twice as much. So one of our rules, when looking for acquiring has the assumptions in your revenue projections, and double the time.
Joanna: And it’s interesting that you mentioning all of these, I’ve spoken to many accounting practices on the some in this podcast and I’m just thinking at the moment of one, Ed Chan from Chan and Naylor talked about acquisitions that they make and how they’ve now got a strategy where they’ll acquire, but then they’ll sit the business exactly as it was for 12 months and only after 12 months where they start to properly integrate. And I thought, what a great approach is that because when I reflect on many of the transactions that I can see have had issues after completion in the integration phase. Generally, it does always come back to moving too fast or not having some of these parameters understanding what successes and all those things but it’s interesting that you talk about speed, and that certainly reflects in what I’m seeing.
Marc: And the reason why people move too fast in inverted commas is that when they do the spreadsheets, they go, Well, we’ve got 18 months to make this work. And we need to get out of return and cost of capital because ultimately, you know, if you’ve got a million dollars, you could get 11% In the property Marcet 14% in the equity markets, etc, etc. So it is kind of reverse-engineered against the deployment of capital and those sorts of things. But you know, the case study you mentioned of Chan and Naylor, like, that’s fantastic to hear that. Because, you know, keeping people situated, again, just like the Northern Beaches merger that I was talking about, you know, that three-year timeframe.
It gave everyone the time, and they actually got there ahead of that. And they, you know, they spent the majority of their energy on integrating the culture. Because that was the key, because, you know, as soon as people are sticky to the business in the new business, you know, that works really well. So, you know, it’s the capital component and in winner, and when I hear a case study someone just saying, well, let’s just stay where you are for a year, like, yeah, that’s music to my ears. And you know, in a larger well known, I suppose, as you know Jo when Price Waterhouse merged with Coopers and Lybrand. 20 years ago now, we were coaching PwC On the west coast of the United States, and when I first started coaching them, all the partners would introduce themselves as you know, I’m Bill Smith, I’m ex CNL. I’m John Smith, I’m ex PWand I was going to coach them in this room, a beautiful boardroom in LA, overlooking the whole city. And I’m sitting there going, that’s not gonna work guys. You have to introduce yourselves properly but I’ve got in the lift with someone who’s a junior as a graduate accountant.
And I said, No, we’re just chatting. I said, Well, you know, which one are you from? PwC or CNL you know, and they looked at me said neither I just joined PwC and I so I kind of thought okay, there is hope because the juniors haven’t been inculcated with all the right solution. So you know, that, you know, so that was open, you know, 20 years later, you know, no one mentioned where they were from originally, ultimately you have to get that, you know, we were from this side of the camp eventually out. And new people joining in. And one of them, you know, the key KPIs should be staff turnover. You know, one of the most important things to focus on is the retention of staff. Culture and giving that time because if you retain staff, you’ll retain clients, because as soon as the staff turnover, you know, the cost of a key staff member leaving is twice their salary. So, the great Gartner studies were, if you have $125,000 a year staff member, the cost of them of your business of leaving is $250,000 that year. So if you’re a business of 20 people and for staff leave, it’s almost you know, it’s a significant, you know, impact on the business.
So, working on retaining staff, but then also acquiring new staff. We don’t have any, you know, we don’t have any history, so to speak, in that Coopers and Lybrand, and PW example means The you know, the new firm or the new company just is that new company and you know, again right now at PwC You know, there’s a huge majority of people don’t know it was you know, Coopers and Lybrand PW 20 years ago our companies on the call will obviously know that button and with and Deloitte you know so anyway used to be Arthur Young and Ernst and Whinney from memory back in the day, so you know, then they merged, etc. So, you know that the retention of staff but the attraction of new staff is key. But yeah, then the time you know, focusing on culture, giving everyone enough time to make it work because as soon as you put an artificial time limit on human beings, we don’t respond well under pressure.
Joanna: As you say, this accounting practice had a timeline but it was far enough into the future that it didn’t create the anxiety.
Marc: That actually works to their advantage because everyone will be able out on the coast. So by taking the pressure off, they naturally integrated much more quickly. And they were actually able to bring forward but if they’d said, we need to do this in two years. It wouldn’t work.
Contact Marc Johnstone
Joanna: Okay, fabulous Marc. Look, I just want to thank you so much for coming here to talk about why three-quarters of acquisitions fail. And I’m looking forward to you coming back for part two on how we make it a success and what to look for when acquiring so and But Marc, if any of our listeners want to make contact with you, how do they go about doing that?
Marc: It would be [email protected]
Joanna: Excellent. And of course, as always, we’ll put links to that in our show notes. And on our website. Marc absolutely loved it. I’m really looking forward to having you back for part two.
Marc: Yeah. Thanks for having me.
Joanna: Well, that’s it for part one. a two-part series all about acquisitions for growth. And of course, in this episode, we talked about why it is that you might acquire for growth if three out of four acquisitions fail. And I’d love you to come back to our next episode, which is also with Marc where we dig into why is it that if three out of four acquisitions fail, you would still want to decide to go down the path of an acquisition, how do you become the one out of four that makes the acquisition or rip-roaring success. So in our next episode, that’s what Marc and I dig into but for now, if you would like more information about what Marc and I were speaking about today, or in fact, if you’d like to download a transcript, then all you have to do is head over to our website at thedealroompodcast.com or check out the show notes of this podcast on your podcast player.
There you’ll be able to find out how to contact Marc Johnstone at Shirlaws Group if you would like some assistance in getting yourself ready for the strategy of acquisition there, you’ll also be able to find out details of how to contact our legal Eagles at Aspect Legal, if you or your clients are looking at building up for acquisition for growth, or indeed, if you’re looking at building for exit and want to understand the best way from a legal perspective to approach this. Well look, I hope you enjoyed this episode. And make sure you hit subscribe on your favorite podcast player. So you can come back and join us in part two, which is the more upbeat part of this two-part series where we talk about what to do to make your acquisitions a success rather than this statistic of the three in four failures in acquisitions. All right, look thanks again for listening here at The Deal Room Podcast you have of course been listening to Joanna Oakey and our podcast has been very proudly brought to us by our commercial legal practice Aspect Legal. See you next time.
Our Business Sales and Growth by Acquisitions Services
Aspect Legal has a number of great services that help businesses prepare for a sale or acquisition to help them prepare in advance and to get transaction ready. And we’ve also got a range of services to help guide businesses through the sale and acquisition process.
We work with clients both big and small and have different types of services depending on size and complexity. We provide a free consultation to discuss your proposed sale or acquisition – so see our show notes on how to book a time to speak with us, or head over to our website at Aspectlegal.com.au
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