Planning for Successful Mergers and Acquisitions Requires Expert Guidance
Mergers and acquisitions can be an important part of an overall business growth strategy, and this fact is nowhere better seen than in the deals struck by major corporations. Of course, close examination of these major business deals can also reveal the fact that not all mergers and acquisitions are successful. In some cases, these deals just don’t benefit the acquiring company as expected, whether in the long-term or short-term.
An illustration of this point is given in a recent article in Plastics News which looked at 10 merger and acquisition deals in that industry. One of the examples involves TriEnda, a Wisconsin-based thermoforming company which was acquired by Illinois based thermoformer Wilbert Inc. in 2007. Two years later, nearly 40 percent of the TriEnda stock was sold to the owners of an Ohio-based plastic machinery firm. It wasn't long after that sale that the company began to fail.
Although TriEnda was ranked North America’s 15th largest thermoformer in 2010, the company soon began to fail when it opened a plant in Indiana. That move quickly led to Dutch firm SAS gaining significant sales over TriEnda. Eventually, TriEnda was sold to the Lexington, Kentucky-based Spara LLC in the midst of litigation.
While this particular merger is not illustrative of all mergers and acquisitions in every industry, it—along with other failed merger deals—is a reminder that companies need to carefully map out their short-term and long-term goals with respect to mergers and acquisitions. Needless to say, these deals are an investment, and not all investments are wise, particularly if the terms of the agreement are stacked against the acquiring company from the start. The latter issue is a particularly important reason why it is important for companies to work with an experienced attorney in planning out and executing mergers and acquisition deals.