Anatomy of an Acquisition

Scott Widmeyer

Three years ago my firm, Widmeyer Communications, was acquired by Finn Partners, and questions whether the match would work out have finally subsided. For those with ringside seats, primarily employees and clients, they see how we’ve combined and integrated to form a bigger, better company.

To the outside world, one clear proof of our successful union is that we’ve retained key clients while adding significant new accounts. Another, no less important, is that we’ve retained key staff who made Widmeyer a successful, happy company.

In the larger picture, Finn Partners continues to flourish and is one of the country’s top independent firms, with revenue over $80 million. It has doubled in size since acquiring Widmeyer.

After 30-plus years in PR, including 25 as agency owner, I know most deals don’t work out this well and that some end up doing more harm than good.

It should surprise no one that the questions I get now are from other buyers and sellers asking, “What advice can you offer ...what do know now that you wish you’d known earlier?”

Let’s be clear: there is no magic formula for a successful union, in life or in business. That said, here’s what was done right in combining our companies and some of what I learned.

I can’t overemphasize the importance of good advice and good advisors. Before I gave thought to any kind of deal, I met Art Stevens at a conference in 2009. Art, erstwhile president of Lobsenz-Stevens and the U.S. arm of Publicis, heads The Stevens Group, a PR M&A firm.

Art engaged me in a dialogue about my company’s future. I didn’t need Art to tell me that continuity planning was a requirement of good leadership, but it didn’t hurt to have him remind me, then approaching 60, to be thinking about my firm’s long term future.

The financial implications alone were significant — we were an $11 million firm — but there was more at stake than dollars. I wanted the best future for my staff. I still do.

Art Stevens

Art and I had a dialogue that continued over more than two years, during which time he helped me define what I wanted for the firm’s future and what kind of company might make a good suitor. I also discreetly sought advice from many friends gained over my career.

What came out of my conversations was the realization that combining with the right company was something I should consider. However, I wasn’t going to pressure myself to make a deal, and Art knew we didn’t want Widmeyer shopped around.

Another lesson I learned was not to start taking meetings if I wasn’t serious about selling. It’s not the buyer’s role to convince a seller to sell.

From the time of my first discussions with Art until my sale closed was nearly four years, which brings up an important element of making a good match: time.

There’s rarely a reason to rush a deal. “We don’t try and move too quickly in these situations,” Peter Finn, CEO of Finn Partners, said recently. “These are big decisions requiring major commitments. Let’s date a while before marriage.”

Realize that getting to a deal will take six months or more. Use the time for due diligence and to ensure you are making a happy union … which brings us to the next major consideration: culture and chemistry.

Widmeyer worked hard to build a diverse, inclusive culture and in 2012 won the PR Council and PR Week “Diversity Distinction in PR Award.” It meant a lot to us, and if my firm were to be acquired, I needed a suitor with similar values and vision.

Art attended that award ceremony, where I also ran into Peter Finn; Finn Partners was also vying for an award. Shortly afterward, unknown to me at the time, Art contacted Peter and without divulging names, probed him on Finn Partners’ interest in acquiring a D.C. firm. There were synergies Art knew would appeal to Finn, and Art also foresaw a cultural fit.

It was clear from our first meeting that Widmeyer and Finn could be a good match. The chemistry clicked for Peter and me, as did our vision for our firms’ future. We saw the value that each other’s business brought to a combined company.

Our first date was a good one, and thus began a period of shuttle diplomacy for Art in bringing us to terms. Again, I can’t overstate the importance of patience and good advice. Just because we decided to move ahead doesn’t mean it was smooth sailing the whole way.

“One rule I’ve learned in acquisitions is to keep the principals from direct negotiation,” Art said afterward. “Having emissaries handle talks avoids erosion of the mutual respect that initially brought parties together. I’ve seen deals implode when principals decided to work out terms themselves,” he said.

It took about six months from when Peter and I first sat down until we closed our deal. Afterward, we had the normal hiccups, mostly over billing systems and technology. Both our firms made changes or adapted in some way. Our employees saw that Peter and I were transparent in dealing with problems, respectful of each other’s opinions and readily open to change. That attitude filters down.

What’s the one most surprising revelation? Probably that when one becomes successful, as many firm owners do, it’s easy to forget there’s also a great future for yourself and your company when teamed with the right enterprise. There’s much to be gained from giving up complete control.

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Scott Widmeyer founded Widmeyer Communications where he served as chairman and CEO, prior to becoming founding managing partner at Finn Partners in 2013.