Commercial Integrator February 2021 - 30

BUSINESS Mergers & Acquisitions
digital signage integrations, the need for
a sophisticated technical skillset has never
been more important.
Not only is it important to understand
the emerging technologies and proactively
match them to a customers' needs, but
the ability to engineer, integrate and install
these technologies has become critical.
In addition, the use of complex AV technologies
outside the traditional corporate
or enterprise verticals, in markets such as
healthcare and aerospace and defense
has amplified the need for sophisticated
integration expertise.
To address this need, pro AV solutions
providers are using M&A as a means to
acquire sophisticated AV and IT talent while
building-out and expanding the scope of
their product and service offerings.
The union between AV and IT has never
been more compelling (and necessary)!
How can business owners and AV professionals,
benefit from this M & A activity?
There are four primary approaches to
leverage the trend.
Strategic Acquisitions
Given the uptick in activity, now may be a
great time to explore acquisition opportunities
to drive growth in your business. Are
there geographic expansion opportunities?
Perhaps to an adjacent city or state?
Does your strategic plan include
diversifying into a different end-market?
Perhaps your business is currently focused
on corporate and enterprise customers -
adding exposure to government or higher
education might leverage your core AV
skillset into a different vertical and build
further diversification.
Would your organization and/or customer
base benefit from an expansion of your
service offerings? Perhaps your customer
base has a need for unified communications,
or digital signage?
Are there other products or services that
you could cross-sell into your customer
base? The answers to these strategic questions
could involve M&A where appropriate.
If acquiring anther business is not in
your vision, perhaps being opportunistic
and watching as other companies consolidate
could bear fruitful resources for your
company in the areas of talent and customer
acquisition.
Talent Acquisition
This is often an overlooked byproduct of M
& A. While most acquisitions tend to result
in new growth opportunities for an acquired
company's employees, it is possible for
consolidation to result in the loss of jobs, particularly
as businesses may seek to combine
in order to reduce fixed costs and administrative
expenses and benefit from synergies.
While the loss of jobs is unpleasant,
talented employees can often find a home
within other organizations. From a business
owners' perspective, identifying talent
that may become available as a result of an
acquisition may be a great way to fill open
positions or find a strategic hire who may
open the door to new customer relationships
or provide you with a technical skillset
that may otherwise be difficult to find.
Customer Acquisition
While most properly executed M&A transactions
do not result in significant customer
attrition, it is not uncommon for customers
to worry about how a transaction might
impact their end-user experience, causing
them to explore competitive alternatives.
Following a transaction, merged companies
may focus on quickly capturing
synergies and avoiding major integration
disasters while losing sight of customers at
a time when they are most likely to bail.
Being attentive and opportunistic in the
aftermath of an industry acquisition can
potentially yield new, perhaps unexpected
business development opportunities.
Sale of the Business
Lastly, but perhaps most importantly, the
increase in industry M&A will present
opportunities for business owners to finally
explore the sale of their own company.
With over $600 billion of private equity
institutional capital on the sidelines combined
with historically low interest rates and
an active financing market, there has never
been a better time for business owners to
contemplate a sale.
Similarly, strategic buyers with strong
balance sheets continue to be acquisitive
as they seek to grow revenue, profitability,
and capabilities through acquisitions. This
desire to expand into a growing market, is
marked with buyers paying higher multiples
than in previous years.
Industry consolidation and M&A are
overwhelmingly positive trends with the
proper perspective and outlook. Opportunities
to drive growth and expansion are
available if you know where to find them.
We are very confident that deal making
will continue to be strong in 2021 and
expect that competition for quality pro AV
businesses will increase among potential
buyers, creating opportunities for all industry
players to succeed and thrive! CI
Ari Fuchs is managing director of
The DAK Group. Contact him at
afuchs@dakgroup.com.
30
Commercial Integrator FEBRUARY 2021
commercialintegrator.com
http://www.commercialintegrator.com
Commercial Integrator February 2021

Table of Contents for the Digital Edition of Commercial Integrator February 2021
