In a classic “big fish eating a smaller fish eating a smaller fish” scenario, UK-based UBM announced its plan to acquire Informa. Informa earlier acquired Datatmonitor, which had acquired Ovum and Butler. Ovum, of course, had made three rapid fire acquisitions (i.e., RHK, Summit Strategies, Orbys) of its own before Datamonitor acquired it.
These serial acquisitions are distracting to management and analysts alike so research quality and timeliness could suffer. Also, some analysts will likely think “that’s it” and start developing a personal exit strategy. Because analysts are the core of any firm, anything that could cause them to walk could dramatically impact the relevance of the firm to your AR strategies and analyst lists. Besides the impact on analysts, this latest merger might be the last straw for sales representatives and client service personnel as well. As a consequence, AR teams need to be proactive in ascertaining potential pitfalls and opportunities this latest industry M&A move might provide.
SageCircle Technique: Steps* to immediately take:
- Ascertain whether any of your primary analysts might be affected
- Schedule inquiries with key analysts to put your finger on the pulse of morale and rumors
- Inventory your analyst contract with the affected firms to determine when they renew
- Hold any current contract negotiations until you can develop best case/worst case scenarios
- Evaluate any ongoing consulting engagements for potential disruptions
- Review pending analyst consulting days to determine whether it makes sense to continue with the day
- Identify if analysts at the firms might be good candidates for open senior strategy or marketing positions in your company and send leads to HR
* SageCircle Advisory clients: Please call 650-274-8309 if you want to discuss the implications of this latest acquisition and how to apply the suggested SageCircle Technique to your situation.
Bottom Line: While the firms and analysts appear to have weathered the prior rounds of acquisitions relatively well, AR is advised to “hope for the best, but plan for the worst.” Because the people capital of each firm can walk out the door at any time, it is best for AR to proactively plan for any actions that adversely affect your AR strategies and plans.
Question: AR Teams – Because M&A is a regular occurance in the analyst industry, do you have standard plans and checklists for when an M&A event happens?