Acquisitions on the Brain?

Mergers-and-Acquisitions-Insurance-1011Often with acquisitions, some of the most important considerations happen before and after the deal.  To get an inside take from someone who has years of M&A experience, we sat down with Dennis Ensing, CEO of TransGaming and AceTech Ontario CEO member.  Dennis took us through some key aspects of an acquisition process that can either help or hinder the transaction.

Before Negotiation:

Everyone knows there’s two types of acquisitions, there’s the ones you seek, and there’s the opportunistic acquisitions that fall in a CEO’s lap. As great as the latter are, Dennis feels that as a CEO of a growing technology company, you should always be seeking out targets for acquisitions and have a process in place to do so.  With that being said, there’s some considerations to be made once one of those leads takes fruition.  To a large extent, the M&A process is not core to the business you are running, so they can often be a distraction.  So once you’ve got an acquisition on your plate, something else tends to fall off, “if you’ve got one eye on the business and one eye on an acquisition, then what about financing, what about planning for the exit, what about my family at home?”, says Dennis.  To make sure nothing falls through the cracks, many companies will hire an investment bank to be the front end of the transaction process.  For those who don’t, it’s critical to have someone by your side who’s running point on those areas that you know are going to suffer during the acquisition process (except probably for your family!).  “If I’m running the acquisition process and moving forward with a transaction, the core business better not suffer”, says Dennis, “and I need to know that I’ve got a right hand person who’s pushing that forward towards the objectives that we set and achieving the milestones that we need to so that my ‘distraction’ isn’t affecting them.”

Since an acquisition can take 4-6 or even 8 months before completion (after being identified), it is critical that before you start you have a process in place for what those next months are going to look like and who is accountable for what.  If not, it can take on a life of its own and can end up taking 9-12 months, or even 18.  During Dennis’ investment banking days, he became increasingly frustrated that there was no general overview in place of what the process looks like.  As such he created his own.

Click here for Dennis’ acquisition process & timeline.

After the Transaction:

Have you acquired a company? Congratulations! But there’s a couple things to remember once the deal is done, “If you don’t plan for integration before the closing, you can end up with a real mess”, says Dennis.  Acquisitions take a team, and that team can fluctuate through the process, but it’s important that you’re bringing your key business leaders in at the appropriate times so they can plan before closing and take ownership of the integration.  Part of the integration process includes culture.  After the dust settled with TransGaming’s 2012 acquisition of Oberon Media, they started to make integration related changes, and the top of that list was managing the cultural fit between the two businesses, “Culture trumps everything. People can sit there with the spreadsheet and say ‘oh, that’s what the integration will look like’”, explains Dennis, “but if you can’t marry the cultures, it’s never going to work”.

 

How to Acquire and Manage Talent Globally

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So you’re a manager of a retail store. You scan the room, seeing each one of your employees through the several racks of woman’s garments you just put on sale two days ago. You look to your left and see one employee with their shoulders sagged and a mundane look on their face. You look to your right and you see your star sales representative chatting up a storm with a couple of prospective buyers.

It’s easy to manage employees and talent when everything and everyone is literally right in front of your face. Is Pete meeting his targets? Nope. Why? Probably because he spends more time on his phone than an adolescent in love. You see that ‘A + B’ usually equals ‘C’.

But talent acquisition and management takes much more effort when you – the CEO, President, HR Manager, etc. – are located a world apart. Just ask Dennis Ensing, CEO of TransGaming.

A little about Ensing and TransGaming. In short, TransGaming today offers high-quality games and apps direct to Smart TVs everywhere. When asked for an elevator pitch, Ensing gave a one-sentence recap – “What Netflix is to movies, we want to be for video games.” As such, Ensing has built a comprehensive operation and has employees in three countries: Ukraine, Israel and Canada.

If this working model sounds familiar to you, or you plan on expanding your company globally, you may have a few questions. After picking Ensing’s brain, this is what we found:

Hire Through Agencies On-Site

Looking for talent? There are many ways to do so – co-op students, LinkedIn, word of mouth, job boards. Ensing sang praises for engineering co-op students at Waterloo when he was looking for nearby talent years ago. Now TransGaming hires by way of on-site agencies. When staffing a foreign office, it’s the most efficient and cost effect way to hire, says Ensing.

“Typically they are much less expensive than they are here, so we do make overseas hiring a practice.”

“In Ukraine, you get two to three people for the price of one, so its the first place we think of hiring and we have some really great and talented people there who are happy to work for us.”

Have a Personal Touch, Be Connected

As the chief, the need to be accessible is heavy in any working capacity, but when you have employees scattered across the globe, that need is likely a little heavier. For Ensing, he also has TransGaming troops in two of the world’s most unstable areas today. Israel’s regular struggles with Gaza and Ukraine’s recent tussle with Russia have exponentially increased the importance of not only communication, but support from Ensing and his management team.

Read ‘What the crisis in Ukraine taught us about our staff’, a story published in the Globe and Mail about TransGaming’s fiery experience with Ukraine’s protests in Kiev.

“I think personal touch is incredibly important. At the end of the day, people respond when they are valued and they are valued when you take the time to know who they are, what matters to them and what makes them tick.”

“I make regular trips overseas, I’ve been to our overseas offices three times this year, and our VP of Finance has also made the trip.”

“Every time I go, I have a team session with everyone in the office. On top of that, we have quarterly ‘town halls’. We also have a scrolling PowerPoint in each office that is updated daily with news and information.”

Tear Down Your Borders

So there are boarders. That doesn’t stop you from Facebooking your mother-in-law in Europe. Over 100 years of modern globalization has torn down these imaginary borders, and that can apply to your working eco-system as well.

“I actually still don’t think we get connected enough. I’m now looking for some new thinking about that myself and one of the things I’ve been leaning towards is an activity that is inter-office. Maybe it’s healthy eating, maybe it’s having a more active lifestyle. We want to take one person from each office and make a team, which allows them to interact together… to try to be the best of all the teams within the company in that activity.”

“I don’t think any one thing works, it definitely depends on the culture.”