Anatomy of an Acquisition: Natick PR firm makes major decision
iBy Julia Tanen
NATICK - "When you reach an obstacle, turn it into an opportunity."- Mary Kay Ash
Based on last year's first and second quarter projections, my boutique public relations firm, TanenPR, was destined for great '08 results.
We were making our numbers. June '08 came upon us and several client programs slowed. A quiet summer morphed into a tumultuous fall. By mid-September, we determined to hold on until the New Year, confident this was a momentary blip.
In November '08, we felt hopeful for 2009, and made plans to try to double revenues, to reach goals we'd never before met. In a good economy, there was no reason why we couldn't achieve our goals.
By mid-January, our growth goals were set aside, and we resolved to maintain status quo. Our small firm had been operating for eight years, based only on referrals and existing contacts. For the first time, we ventured out, beginning to network, in an effort to bring in new business. The effort was successful in keeping us in business; however it wasn't a growth period.
By July '09, it was clear that a merger with a larger entity would bolster our service offerings, our size and our competitive edge. Yes, the recession would eventually end and we would come out from under it. However, my goal was to come out of it more resilient, and a merger or acquisition with a strategically complimentary, much larger firm, made sense.
Through an agent, I connected with several firms in New York. After initial discussions, I narrowed down the choices to two companies. One of them was KCSA Strategic Communications, a 40-year-old, 35-person firm specializing in integrated investor relations, public relations and marketing programs.
"We were looking for a partner in Boston with a solid book of business, who could bring not only clients to our company, but also the ability to aggressively pursue new business. Tanen and her team fit that description, and offered us the ability to geographically expand," said Jeff Corbin, KCSA's CEO and managing partner.
As one of the top five independently owned investor relations agencies in the country and one of the top 20 independently owned public relations firms, KCSA had the most to offer us in terms of services, infrastructure, reputation and expertise.
On Oct. 17, 2009, we officially joined forces. TanenPR became the Boston office of KCSA Strategic Communications. "The acquisition happened very quickly because we were on the same page from the start. The teams on both sides were eager to make the transition work," said Corbin.
Completing an acquisition can be a difficult process. Several key items made for a smooth transition.
No expectations: When we began this process, it was with the full realization that we did not have to do this: this was only a choice we would make if it would add to our capabilities, our culture and our growth potential. Walking into the first meeting, I didn't think I would end up being acquired.
"The first time we met, it was only about an hour. From the start it looked like a possibility, but we remained very open-minded in order to see where this potential partnership might take us," Corbin said.
Manage your internal team's expectations: Early on, I mentioned to my staff that I was exploring new possibilities. I downplayed it because 1) I wasn't sure it would actually happen and 2) I wanted them to go on with business as usual. If a transition were to happen, I wanted positive results.
My staff didn't need to worry about something that might never happen. Corbin did the same, "The staff knew we were in discussions, but we didn't make a formal announcement until the deal was completely closed."
Make sure the cultures are a match: We started the company in order to provide better service to our clients. We felt that providing a senior partner on every account would make a difference in both client satisfaction and overall results. The formula worked, and I wanted to be sure that I would be acquired by a firm with the same values
KCSA's philosophy was a match and the firm was very democratic, similar to ours. The company's positive, professional atmosphere, coupled with its long history of excellent service, was appealing not just to me but to my staff members.
Determine your "go, no go" decision points: My "go, no go" point was retaining my entire team. I had to go with a firm that trusted our process as much as we trusted theirs
Throw your ego out the door: If you are the kind of person who likes to see your name on the door, an acquisition is not for you. I started the company to provide better service, not to have my name on the door. So letting go of TanenPR wasn't a big deal.
Dollars and sense:The dollars had to make sense, as did the future potential. KCSA offered us an attractive package for growth, allowing us to grow to a substantial size in the next few years, to become a formidable presence in the Boston market.
Listen to your staff:After meeting with two very different firms to determine our options, I met with my staff and described both firms. They wholeheartedly agreed that KCSA was the best choice for all of us. Letting them voice their opinions was important, and made the transition easier.
Finally, honesty and transparency were key:As was true of essentially all firms in our industry, both KCSA and Tanen were affected by the recession in 2009. Both were on the uptick, but we had to be frank about where we were and our future plans to gain market share.
"We were on the same page in terms of how 2009 had gone, and agreed on our goals for 2010 and for the Boston market," said Corbin.
Part of the KCSA strategy was acquisition of a team, staff, clients and growth potential. Our strategy was to join a larger player in order to become a viable force in the market. Both parties met those goals on Oct. 17 when we were acquired. I've always been a big believer in knowing when to move on. It was simply TanenPR's time to move on.
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