In a classic “big fish eating a smaller fish eating a smaller fish” scenario, UK-based UBM announced its plan to acquire Informa. Informa earlier acquired Datatmonitor, which had acquired Ovum and Butler. Ovum, of course, had made three rapid fire acquisitions (i.e., RHK, Summit Strategies, Orbys) of its own before Datamonitor acquired it.
These serial acquisitions are distracting to management and analysts alike so research quality and timeliness could suffer. Also, some analysts will likely think “that’s it” and start developing a personal exit strategy. Because analysts are the core of any firm, anything that could cause them to walk could dramatically impact the relevance of the firm to your AR strategies and analyst lists. Besides the impact on analysts, this latest merger might be the last straw for sales representatives and client service personnel as well. As a consequence, AR teams need to be proactive in ascertaining potential pitfalls and opportunities this latest industry M&A move might provide.
SageCircle Technique: Steps* to immediately take:
- Ascertain whether any of your primary analysts might be affected
- Schedule inquiries with key analysts to put your finger on the pulse of morale and rumors
- Inventory your analyst contract with the affected firms to determine when they renew
- Hold any current contract negotiations until you can develop best case/worst case scenarios
- Evaluate any ongoing consulting engagements for potential disruptions
- Review pending analyst consulting days to determine whether it makes sense to continue with the day
- Identify if analysts at the firms might be good candidates for open senior strategy or marketing positions in your company and send leads to HR
* SageCircle Advisory clients: Please call 650-274-8309 if you want to discuss the implications of this latest acquisition and how to apply the suggested SageCircle Technique to your situation.
Bottom Line: While the firms and analysts appear to have weathered the prior rounds of acquisitions relatively well, AR is advised to “hope for the best, but plan for the worst.” Because the people capital of each firm can walk out the door at any time, it is best for AR to proactively plan for any actions that adversely affect your AR strategies and plans.
Question: AR Teams – Because M&A is a regular occurance in the analyst industry, do you have standard plans and checklists for when an M&A event happens?
It’s interesting that AR commentators take this as a ‘done deal’. At the moment, Informa’s not saying it will accept the bid and there appear to be other players circling – including private equity players.
I appreciate that this doesn’t change the main thrust of what you’re saying but nonetheless…
Hi David, Good point. Because I do not look at an M&A event like a financial analyst, there are some details I gloss over. That said, a protracted fight between Informa and UBM or the entrance of other potential buyers means it could get nasty leading to some valued employees — analysts, sales, client service — heading for the exits. Even if the deal collapses, there might be some employees that decide they are done with the revolving door owners and uncertainty.
Reminds me of the old chesnut are working with the analyst or the firm? I realise its both, but I met one analyst last week, who said – I won’t bother with giving you my business card as we have worked together over a long period during which time I have been at three firms!
[…] Strategies, Orbys) before getting acquired itself by Datamonitor, which was acquired by Informa (click here for more […]
[…] Pyramid Research acquired by TechWeb’s Light Reading Communications Network Posted on August 28, 2008 by sagecircle Here is the latest in analyst industry merger and acquisition events. TechWeb is a division of United Business Media, which made the hostile acquisition move on Informa (owner of Datamonitor, Ovum, et cetera, see here). […]
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