Merger Acquisition

How Synergy Resources Provides Value and Guidance during the Merger & Acquisition of a Manufacturing company

– We Offer a Structured Approach to Onboarding New Manufacturing Companies

Part 1 of a 2-part Q&A series with Michael Canty, Executive Vice President at Synergy Resources.
Q: What’s the first thing that investors should consider when planning for a Merger & Acquisition of a manufacturing company?

Michael: How to quickly stabilize, standardize and realize early value. Most Mergers & Acquisitions do not realize early value because of poor post-deal integration planning and execution. Said differently, the careful execution and speed in which post-merger integration is carried out will ultimately determine how quickly you can realize value.

Q: What should investors consider early on to help mitigate risk and realize value sooner?

Michael: A common mistake seen in the the post-merger integration is related to the lack of strategic planning early on in a deal’s life cycle.  Simply put, the integration phase requires strategic thinking even before the deal is executed so the integration team can move quickly once the deal is closed. 

Q: What should be considered during the strategic pre-deal planning?

Michael: First, it is important to realize that regardless of the size of the deal, post-merger integration is complex simply because it happens in parallel with the normal core activities of the business. This is compounded by the fact that the seller has likely worked to keep direct and indirect labor costs very low during the “selling” phase. This immediately leads to bandwidth and capacity issues during the integration process.

Second, change management must be considered as an essential part of the integration process. In the early stages of integration, it is best to over communication as it will help to establish trust early on and gain the support of the newly acquired staff. That will allow the integration team to consistently focus on the deal’s strategic objectives rather than mitigating conflict.

Q: What can the investor do to overcome these sometimes-overlooked risks?

Michael: This is where reaching out to a trusted business improvement partner like Synergy Resources has become a natural response for many North American businesses.  Synergy’s 20-plus years of experience in the small to mid-sized manufacturing industry provides a level of hands on support and guidance that allow investors to realize early value by gaining additional capacity to help the acquired company reach their full potential.

Q: How does Synergy help investors eliminate roadblocks, realize early value and achieve their full potential?

Michael: Our first focus is on process synchronization and stability. Difficulties with synchronizing business processes will slow down the new manufacturing businesses overall operations and could lead to late deliveries, lower quality and lost profits. This must be avoided at all cost.

Q: What other areas of focus do you see as critical in achieving stability?

Michael: Data! Companies need to eliminate the guessing early on. This is a critical element in limiting risk. Said differently, the investment company will remain at risk until the merging business has establish stable processes and accurate comparable data. For this reason, integrated businesses need to work toward a common business platform to execute processes, measure performance and enable data driven decision making.

Swift action is necessary when enabling the success and realizing early value. Having systems in place, process defined and real time visibility to data enables strategic problem solving and provides the integration teams with the necessary tools to succeed.

Q: What do you mean by a common platform and why is that a critical focus?

Michael: Many companies use outdated or inefficient technology with limited connectivity. This slows progress when it comes to the post-deal integration phase. If there is a lack of synchronization in the newly formed company, the value of a deal decreases and can lead to post-close failure.

Q: Why do investors and small to mid-sized manufacturing companies select Synergy over the hundreds of Business Improvement firms and ERP providers in North America?

Michael: We believe that Synergy is an easy selection for investors and manufacturers alike.  First of all, Synergy is unique in today’s industry in that we provide a wide range of products and services which is uncommon in today’s Business Improvement Market. Instead of hiring a Business Improvement firm and an ERP implementation firm, Synergy provides one stop shopping for both.

Our software products and software agnostic service offerings include three different ERP systems that allow us to offer our customers a practical solution that fits their business needs. Synergy also provides multiple CRM (Customer Relationship Management), QMS (Quality Management Systems) and business analysis and reporting tools.

Along with these offerings, Synergy has worked hard to establish “Best of Breed” Partnerships with industry leaders in order to deliver complimentary products and services to meet the needs of the small to mid-size manufacturing companies.

When it comes to service, our wide range of services is unmatched in today’s market.  Synergy offers Quality focused services, Strategic Business Services and Lean / Continuous Improvement programs and mentoring. Collectively, with our Product Development team, Technical Services and Software Application teams Synergy provides the widest range of services offered to the manufacturing industry.

And we’ve been serving the manufacturing industry for more than 20 years!

Q: What else should investors know more about their acquisition and Synergy?

Michael: Usually, companies that acquire a portfolio of multiple businesses are continuously looking out for other investment opportunities.  The first six to ten months is the most challenging time period following a Merger and Acquisition. There’s a certain amount that is learned about an organization through due diligence and then there’s the reality of the organization once it’s been acquired.  

Investment firms have got to get a deeper understanding of the acquired organization’s functions as quickly as possible. And it’s critical to begin the work that’s necessary for attaining return on investment immediately. That’s where Synergy can play a big role.

Synergy provides our customers with a structured approach to onboarding new companies and improving existing companies. As mentioned above, when Synergy Resources works with a company we first work to stabilize and then standardize their business processes and performance reporting.  We do this because our customers want to make apples-to-apples comparisons when analyzing their various business units.  And this will help the investment company establish a standard method to more easily onboard future acquisitions.  

Do you have Merger & Acquisition plans for the future? Have you developed strategic plans for post-merger integration? Do you have a strong platform to build on and the bandwidth needed to rapidly execute the plan?

Contact us to learn more about how we provide guidance during the Merger & Acquisition of Manufacturing companies.