A private company was involved in due diligence prior to the prospective acquisition of another private company in the same sector. We were invited to lead the process of establishing what the fit between the two leadership teams’ would be.

The potential acquirer recognised that “value” in the merged entities was largely dependent upon the ability of the leadership teams to coalesce quickly into an effective working relationship; and to leverage their total contacts / business base. We were invited to lead the process of establishing what the fit between the two leadership teams’ would be. Their talents, skills, competencies, styles and motivation. What would the new environment be like? Who would fit best in which roles? What would be the likely overall style of the merged organisation? How likely was it that the human capital “value” in the proposed deal could be crystallised?

Our personal DNA profiles for both teams and significant other documentary and interview material was also gathered to help the understanding and comparison process.
It quickly became clear that the two organisations were very different, indeed diametrically opposed. The strong likelihood was that only one complete team could be involved in the running of the (to be) merged entity; and that the other team would need to be “released”.

Following a number of very open and frank negotiation sessions between the parties, which we facilitated, serious doubts were raised as to the ability of the merged entity to achieve the “value” objectives that were the raison d’être for the proposed deal. The loss of one leadership team or a number of key members would destroy value (rather than create it) and contacts crucial to the on-going business would be lost or seriously jeopardised. Our Client declined to proceed with the acquisition

The principal at work here is that given sufficient time we can facilitate the creation of a winning team. However in real time critical business transactions this may not be possible and as in this case the secondary outcome was achieved of highlighting the very real dangers and possible failure of the proposed merger