April 4, 2013

Maintaining core values can ease the transitional process

The 2008 financial crisis affected many businesses, and outdoor apparel company Nau was no exception. However, after being acquired by Horny Toad, another clothing organization, Nau was able to maintain its values and principles. This helped it continue to move forward and attract more top talent.

Nau general manager Mark Galbraith explained in an interview with Business Insider that when M&A activity happens in the business world, it is much easier to bounce back when the right employees have been hired from the start. That way, a company's core set of values is not forgotten, even if a merger or acquisition takes place.

"I think the core philosophy and what the company's about hasn't changed," Galbraith said of being bought by Horny Toad. "In terms of who we feel a customer is or what our value proposition would be, the kind of unique things we do, emphasizing sustainability and function and fashion, that hasn't changed."

Galbraith added that while the business model had to change – the company now embraces a wholesale model, which is less capital intense – everyone is still focused on establishing the brand first. However, he did acknowledge that it is easier to make changes sooner rather than later.

While the hiring process is something that business owners must fine-tune, an M&A advisor can assist companies through other aspects of mergers or acquisitions. As Galbraith explained, making it through tough times is much easier when an organization has people who truly believe in the company and its mission.

When companies enter into an M&A agreement it is important to focus on the cultures of each company and how they affect the decision making process. Staying committed to an idea and keeping communication channels open through each step will ensure that a company's bottom line is not compromised and all involved organizations can benefit from the transaction.