Navigating an M&A process: An Interview with Johan Nordenström at Kaplan
Kaplan was acquired by Accenture Interactive in November 2018. Kaplan provides data-driven customer relationship management services that transform customer experience. We caught up with Johan Nordenström, Managing Partner at Kaplan to discuss his experiences and learnings during his M&A process.
Your business was growing very strongly independently. Why did you decide to become part of Accenture rather than continuing your journey as an independent company?
Remaining independent was definitely a viable option. However, we realised that the demand for our particular area of expertise in CRM and data-driven customer experience was growing very strongly; and that we’d be better able to take advantage of the opportunities as part of a larger network. We also recognised that the market was evolving rapidly and we would increasingly want to be able to provide customers with end-to-end experience transformation services, requiring a broader set of services than we had within our company at that time. We could grow those services organically or become part of a larger group, which is what we chose to do.
What were you looking for in a partner for Kaplan?
During our M&A process, we wanted a partner who could help us meet client demand and accelerate our growth. Specifically, this meant access to a broader set of services to enable us to provide the end-to-end services customers want, and an ability to scale into new clients and new geographies more quickly.
However, probably the most important factor was making sure we found a partner that both understood and respected our business including our unique culture, and who would find the right balance between supporting us and giving us the freedom to continue to build on our success. Accenture ticked all these boxes for us.
What was the biggest surprise to you from the M&A process you went through?
I think the biggest surprise for us were the emotional highs and lows, and we had to adapt to that and the inevitable twists and turns in the process. Perhaps not so much of a surprise, but noteworthy nonetheless was the level of intensity and time commitment at some stages. We knew we needed to be well prepared for the process, and with the help of our advisors we had planned ahead, but the level of detail that was required was certainly eye-opening.
What would you point to as the key deal ‘pain points’ and how did you go about addressing them?
The key pain point was the sheer amount of time we needed to dedicate to the M&A process. We had to make sure the business continued to grow and hit its targets at the same time as managing the process. As part of this, we tasked two of the shareholder management team to run the deal process on a day-to-day basis, enabling the others to continue to focus on building the business. Divide and conquer is the key!
What is the best piece of advice you would give to other firms about to undergo an M&A process?
Never underestimate the power of communication within the shareholder and management team. The process is very intense and time-consuming, and it can be easy to underestimate the level of communication required to keep everyone aligned and engaged. Everyone will have different perspectives and motivations and it’s about making sure that they are all aligned as a company. Clear structures and timetables around communications can be really helpful in this regard.
How did you go about working with and getting the most out of your advisors?
We recognised early on that we needed to have a good team of advisors (both financial and legal) on our side. We were fortunate that we’d got to know CG Results International well ahead of our decision to consider a potential transaction and had built up high levels of trust. That is critical when the process gets difficult as inevitably it will at some point. We relied very much on our advisors to negotiate for us to ensure we didn’t damage our relationships with the people that would ultimately become our colleagues, and it’s important therefore to have an advisor you know will really protect your interests. I’d also say look for an advisor who will roll up their sleeves and provide really strong hands-on support on all aspects of the deal from start to finish.
A final piece of advice I would give is do not underestimate the value of speaking to other entrepreneurs that have been through a process before – the lessons learned, and their advice can be invaluable.
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Read more about the deal here