Managing a Successful Acquisition After the Deal Is Done

By: Jim Wooster, Jr., Alarm Financial Services, Inc.

This article is part of our six-part series outlining the many aspects of making an acquisition and financing that acquisition using the recurring monthly revenue (“RMR”) accounts as collateral. The previous article was titled, Financing the Acquisition of RMR Accounts.

 Through our involvement in many acquisitions over many years, Alarm Financial Services has observed that when the deal closes, buyers breathe a sigh of relief and congratulate themselves (and the seller) on completing a very involved and often lengthy process. Perhaps the acquisition process has taken the buyer away from their day-to-day responsibilities of running the existing company, and now they’re eager to get back to any temporarily neglected duties or projects.

Well, this is the time when focusing on the recent acquisition is actually most important. And of utmost importance is communication. Communication with the existing team about the company or accounts acquired –- the billing department for obvious reasons, the service department about any new platforms or technologies, the sales department about the new opportunities for upgrades, add-ons, and new services — and most importantly, communications with the new customers themselves.

 Hopefully, a strategy for reaching out to the new customers announcing the merger or the acquisition, however it is being described, has been crafted cooperatively by the buyer and seller. Keeping the seller engaged post-closing is also essential as significant customer relationships are handed off, and long-time loyal customers are put at ease. Will the old name be retained? Will each customer receive a visit?

 The buyer should also plan on monitoring and measuring the performance of the new accounts separately from their existing accounts, specifically cancellations and late payments, as these measures will factor into the release of a holdback that was likely part of the acquisition terms. And talk with fellow dealers who have made acquisitions – they will all have lessons learned to share.

Learn more about AFS and its loan services at www.alarmfunding.com, or contact Jim Wooster directly at 866-845-2678 x1200 or jfwooster@alarmfunding.com.