When you’re looking to grow your business quickly, you have three main options: build, partner or buy. At Marco, we do all three. We’ve developed new offerings and departments to fulfill unmet client needs, cultivated strategic partnerships and acquired smaller providers in key markets.
For providers hoping to add new revenue streams that require special skills, such as cybersecurity or managed IT, acquisitions can be very attractive. However, in an era when IT failures consistently make headlines, getting the integration right poses a substantial risk. Done correctly, acquisitions combine speed with control to grow your business fast. So, as Marco’s vice president of transformation, I thought I’d provide a few insights about M&A for print and technology providers.
Tips for Buyers
In this industry, some buyers don’t bother fully integrating. They essentially plug an acquired company into their back-end financial reporting and go back to business as usual. They pay a premium yet pass up control and the many benefits of integration.
There are a number of problems with this practice in any normal industry—cultural challenges, higher costs, inconsistent service and persistent operational issues caused by duplicate systems and processes running in parallel. But ours isn’t a “normal” industry.
During a time when cybercrime is skyrocketing, every vendor now represents a potential risk to their clients. We need to access sensitive systems, equipment and data to do what we do. When trust is everything, surrendering control over the client experience is unwise.
The Marco Method
Before we acquire a business, we make sure our culture, processes, pricing structures and technology can be aligned. We ensure the software and equipment that a seller’s clients are familiar with are a good fit for us. We also like to keep the owner on board during the transition period for a smooth continuation of their legacy. Finally, we make sure that the clients and employees we’re acquiring understand the additional value we can provide.
For acquired employees, working with a national provider can open up an exponential number of opportunities, but that’s not always common knowledge. We work very hard to ensure a thorough and engaging onboarding, just as if we had hired each one of them directly. In fact, we recently produced a video in which we interviewed several employees who originally joined our company through an acquisition to speak about their journey.
Rewatching that video, I was moved both by the positive experiences these employees reflected on and also by the tenure they had after the acquisition. I think it speaks to the fact that there isn’t an “us versus them” mentality at Marco. No matter how you came to us, you’re part of the team. At most acquired companies, approximately 33% of employees leave after the acquisition. We don’t see those numbers at Marco; many of the employees who were featured in that video have been with us for over 15 years.
One of my favorite quotes from the project comes from Raymond Shaw, a Marco sales representative: “When I looked at being with a localized, family-owned business, we really didn’t have a lot of positions that were promotable. Generally speaking, if you’re in one position, such as sales, you probably were going to be in sales for the rest of your life. But with Marco, there are so many other offices you can transfer to. There are a lot of opportunities that you may want to grow!”
Regarding our approach to newly acquired clients, we’ve recently doubled down on that onboarding process as well. On the surface, this business may be about technology, but relationships are very important. It’s not enough to simply swap out the signage, voicemail messages and email signatures. We continue to be proactive in introducing ourselves—not as a national provider, but as human beings who are truly excited to get to know our new clients and provide services we stand behind.
Tips for Sellers
First and foremost, I’d advise someone interested in selling their business to get their own legal and financial advisors. As we work through the acquisition process, sellers often ask me for advice on various aspects of the deal. While this as a testament to the amount of trust we build with our sellers, I’m not in the best position to provide that advice as there can be conflicts of interest. I would also recommend sellers review their business’ financial records carefully and ensure they can communicate their value clearly to a potential buyer.
Next, make sure you know what goals are most important to you. Not every seller prioritizes maintaining their legacy. Some simply want to get a quick paycheck and leave, and that’s OK! It’s probably not a good fit for a company such as Marco, but it may be for another buyer. We tend to have a closer alignment with sellers who have a strong desire to preserve their legacy. If that’s an important goal for you, I’d recommend documenting your processes and key employees as well. Identify a core group of people who understand your business, its value drivers and your clients so it can keep providing value 20 years down the road.
Recently, we acquired Lang Company, a family business that’s faithfully served its clients for over 80 years. Its owner, Tom Welter, said, “Our success has been based on building meaningful, long-term relationships with both our customers and our employees. We know that Marco embraces those same values.”
That’s not what every acquisition in America looks and feels like, but it’s what ours tend to look and feel like. It brings me a tremendous amount of pride to serve a company that prioritizes doing what’s right for our employees, clients, vendors and communities during and after an M&A transaction.
