Home > All  > To Merge or Not to Merge?

Are you experiencing an increasing cost of compliance or ‘doing business’? Are you contemplating a merger or acquisition? Do you need to revise your strategic direction? To merge or not to merge? – that is the question. Let’s look at all the pro’s and con’s.

We are seeing an increasing number of businesses and not-for-profit organisations looking to remain competitive and viable by exploring a merger or acquisition. In the commercial sphere, a merger or acquisition may be motivated by owners seeking to vertically integrate supply chains or horizontally integrate competitors and like-minded businesses. In the not-for-profit sphere, a merger or acquisition is usually motivated by the increasing cost of compliance or service delivery and the need to achieve strategic outcomes cost-effectively.

Organisations often need assistance in a number of areas including:

  • Independent facilitation of pre and post-merger discussions at Board, Management and Employee level;
  • Conducting of due diligence activities on behalf of either or both parties;
  • Sustainability considerations (does the organisation need to merge or can it stand alone by refining existing practices?); and
  • Independent advice in relation to Memorandum of Understanding considerations.

If you’re considering a merger or acquisition you need to identify your thought processes around:

  1. Strategic fit for both organisations (how do the organisations align strategically or is it occurring simply because the opportunity presents itself? – Do you need a facilitated Strategic Planning Workshop to revise your strategies?);
    • Cost Vs Benefit analysis (do the numbers stack up?);
    • Impact on customers and employees (have you considered everything?);
    • Memorandum of Understanding (does it adequately address the needs of the less-dominant merger partner?); and
    • Reviewing the sustainability of your organisation and considerations for ‘standing alone’ or seeking a merger.
      In relation to not-for profit entities, you should be aware of the Good Governance Project which focuses on:
    • Panel of Experts delivering 10 support packages on Good Governance;
    • Professional Board Member Development Courses;
    • Disability Sector Leadership Program;
    • It’s Your Business (ADHC) resources on Fraud Prevention and Controls, Probity in Employment, Partnerships and Quality Management; and
    • Resources for Boards and Management Committee’s.

If your organisation is a member of NDS or ADHC, you may be eligible for a subsidy in relation to the above.

If you’re considering a merger or acquisition in either a commercial or not-for-profit environment, please contact your TNR Partner or Adam Bradfield (02) 6626 3000 or 0407 219603 for more information

TNR is an organisational member of National Disability Services (NDS) NSW and is the only local organisation on the NDS NSW Panel of Experts for the Good Governance Project.