Is Acquisition Epidemic a Plague or Blessing?
Having gone through a recent acquisition, I'd like to share my answer to both. It may surprise you, as it did us.
To start with, Walter Karl Inc. rejected any merger discussions for years. We would always sternly reply, "It's not good for our clients." But in February, we had a change of heart and the company was acquired by American Business Information (ABI), which was renamed InfoUSA last week. We quickly found out it was a blessing to us, as well as to our clients.
I can personally say, "I like this." It was the perfect fit for us from the beginning. ABI had the financial strength of a publicly traded company and was actively pursuing new business. Walter Karl's long-standing reputation and services made us an appealing prospect. We both benefited by bringing our strengths to the table and putting the pieces together.
They were the owners of the leading business and consumer files with technical strength to design new products and a broad sales force. We brought the statistical analysis, list brokerage, data enhancements and list-management services. By combining ABI's product breadth and its innovations with our analytical and modeling side of the business, we expanded service offerings on both sides. Now we can do everything and anything the client needs except serve as an ad agency and pick product. No matter what two companies are involved, an acquisition will most likely result in growth of services.
Our clients seem to like it as well. It eases their personnel issues. In the old days, a client would have to hire six different companies and coordinate every stage of the process. They often would go over budget. Instead of hiring a list manager, several list brokers, a computer service bureau and four or five other companies, clients now call one place and get everything they need. It lifts a significant burden. They also appreciate working for a company with larger resources. If a client wants a list and it's not available, we have the ability to compile it for them. If they just need merge/purge and postal processing, no problem. A smaller company can't do that.
The biggest client benefit I can see, no matter in what industry the acquisition occurs, is the ability to access more services more efficiently than in the past. Clients also feel secure knowing a company operates with a wider vision and is held accountable to stockholders. For the list firm, acquisitions provide the financial backing and additional resources to compete and survive. Certainly for ABI, the biggest benefit was the additional capabilities. In fact, ABI has changed its corporate name to InfoUSA because it has expanded its core business database to offer a consumer database of 113 million households, and the list brokerage and list management services of Walter Karl.
But like any marriage, you have to be smart about picking your mate. My recommendation to any firm that is looking for a partner is to scrutinize a company's tenure in the direct marketing business, available resources, product breadth and innovation. More importantly, what made the acquisition of Walter Karl so seamless was the fact that ABI understood direct marketing. It has an aggressive acquisition strategy and it also has vision. The key to the perfect fit is a similar vision. In Walter Karl's case, our expertise added to ABI's vision of where it needed to grow. In turn, as a relationship marketing company, we were impressed with the consultative approach of ABI vs. other companies who simply satisfy one-dimensional needs. Early on, it became clear that we had similar visions to grow the consultative brokerage management side of the industry.
Now that the integration process is complete, we have gained a great deal of experience to position us to continue the acquisition epidemic. It's contagious but painless. A blessing.
Sheldon Zaslansky is president of Walter Karl, Greenwich, CT, a division of InfoUSA.