March 14, 2013

A merger doesn’t always mean fewer workers

When two companies decide to form a strategic partnership, a common fear for many company heads is that employees will lose their jobs. While not completely unfounded, there are ways to ensure that common ground will be found.

Smaller companies in particular must guarantee that all of their financials are in order before entering into any type of negotiations. With a comprehensive company valuation, it will be easier to see how an opportunity will impact not only an organization's bottom line, but also the workers who make up the business.

One example of two companies able to encourage efficiency while not sacrificing employee growth is the recent technology merger between two Louisiana companies. e-Gov Systems and Antares Technology Solutions announced a merger earlier this week, although the two businesses will continue to operate independently.

Antares is a Baton Rouge software developer and consultant while e-Gov Systems runs an online portal for payment of sales and use taxes.

Ezra Hodge, chief executive officer of Ram Ware LLC – the new name of the combined entities – explained to The Advocate, a New Orleans-based newspaper, that the union is all about growth. The 50 employees between e-Gov Systems and Antares will all be kept, and the products, clients and management structure will not be altered.

Hodge added that while Antares has future products that should do well with government clients, e-Gov's relationships with government entities can provide potential customers.

Successful M&A activity produces opportunities that allow for external growth without losing sight of a company's original objectives and culture. For technology-centered entrepreneurs or business owners looking to sell their company, an acquisition strategy must be well-thought out. While deals like Antares and e-Gov cannot always be guaranteed, the likelihood of success can increase with proper planning.