April 30, 2015

For M&A, what’s in a name?

Tech entrepreneurs fought hard to establish their companies' names among competitors in a rapidly expanding marketplace. That's why one of the most contentious subjects approaching a merger or acquisition can be deciding what to call the umbrella under which the companies move forward. Here are a few solutions other companies have implemented to solve the question of what to call the new combined company:

Cede to the bigger property. In acquisitions, a smaller company that's been absorbed by a large corporation might relinquish its branding to the bigger organization. A freestanding firm might be turned into a department or subdivision within the larger entity. In these cases, say goodbye to corporate letterhead. 

Hyphenate. On this blog we've discussed the Elance-oDesk merger, which saw the two businesses combine their names. This presents both companies as equitable partners in a symmetrical relationship. For this solution, the question is often: Who's first and who's second? 

Blend. Professional services network PricewaterhouseCoopers is a portmanteau of Price Waterhouse and Coopers & Lybrand, two firms that merged in 1998 to form the company we know today. While this solution might be hard on the eyes, with enough clout and combined recognition the move can be a success. 

Retain independence. Some companies continue to operate as usual under a new corporate parent. These arrangements can make it a bit easier for companies to hold onto their corporate culture and other identity-based branding features. 

With the guidance of an experienced M&A advisor, your company can fine-tune details in a merger or acquisition to suit your goals. While compromise is essential to any M&A deal, an advisor can help companies arrive at agreements that are satisfying for both parties.