Guest column

All is not lost in a merger or acquisition, says this Houston energy exec

Elizabeth Gerbel, CEO and founder of Houston-based E.A.G. Services Inc., shares how to navigate M&A activity for both startups and large companies. Pexels

Nervous about an upcoming merger or acquisition? You're not alone. Last year, there were nearly 15,000 mergers and acquisitions in the U.S., according to the Institute for Mergers, Acquisitions and Alliances. These transactions, although executed with optimistic intentions, don't always work out. What is it that separates those that deliver from those whose results simply fall flat?

While you won the legal battle, the real culprit to a failed merger or acquisition transaction lies in post-deal activities such as integrating the divesting company's assets into the acquiring company's existing systems, processes, and organizational structure. If executed poorly, companies could face several hurdles, including:

  • Increased acquisition costs
  • Loss in previously efficient business processes
  • Reduced data quality in current and acquired assets
  • Extended TSA timeline

With the stakes being high, it is critical for each step of a merger or acquisition to be rock solid before moving on to the next stage. In fact, when executed successfully, an M&A transaction can significantly benefit both companies — from startups to well-established corporations.

A strategy for M&A data integration

In order to facilitate efficient and effective merger or acquisition, the critical success factors focus on these driving goals: Minimizing organizational disruption and Maximizing ROI. To achieve these goals, we execute three main stages for every merger and acquisition.

  1. Planning
  2. Analysis
  3. Execution

We start with thorough planning, think of planning as the foundation for a successful merger or acquisition. Without a good plan, the company will be vulnerable to all sorts of structural weaknesses. To prevent key elements from falling through the cracks, companies must define objectives and data requirements, maintain strong communications, and develop both short-term and long-term expectations.

The next step – analysis – since data is absolutely essential in mergers and acquisitions. There is a lot to watch out for: What's the best way to extract and convert the acquired data? Will IT or business support need to be permanently added? What system configuration changes are required? What are the impacts to current business processes and internal audit controls? Will additional training be required? The answers to these questions are highly individualized to each merger and acquisition, and they'll impact how seamless the transition will be. Many people gloss over this stage but then realize the criticality not only in the case of a merger or acquisition but also in the case of a future divestiture.

Finally, the last stage: Execution. This stage is one of the main reasons why some mergers and acquisitions may fall short of expectations. To avoid common issues stemming from poor execution – including disruption of previously effective business processes, impaired customer service, and increase in the cost of the merger or acquisition – we coordinate roles and responsibilities, ensuring that all key tasks are executed. From day one to full integration, we continually monitor to ensure the company is on track to meet its initially defined objectives.

The risks and benefits of a merger or acquisition

I'll be candid: Without a solid foundation through adequate preparation, a merger or acquisition is set up to fail. This risk can be higher for startups and small companies, which don't have the resource buffer that some larger firms can fall back on. Large companies may face a different risk, business processes and data may not be aligned with their current state. And yet, according to Economy Watch, an extensively strategized merger or acquisition transaction, beyond increasing the company's size, can yield significant benefits that include:

  • Improving its strategic position
  • Entering a new market
  • Developing new assets
  • Lowering operational costs
  • Expanding market influence

For smooth mergers and acquisitions, we recommend a multi-step process so that you can identify and reduce risks, condense your integration timeline, and quickly capture value. Because despite the challenges, not all is lost during a merger or acquisition – and there is much to be gained.

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Elizabeth Gerbel is the CEO and founder of Houston-based E.A.G. Services Inc.

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This UH engineer is hoping to make his mark on cancer detection. Photo via UH.edu

Early stage cancer is hard to detect, mostly because traditional diagnostic imaging cannot detect tumors smaller than a certain size. One Houston innovator is looking to change that.

Wei-Chuan Shih, professor of electrical and computer engineering at the University of Houston's Cullen College of Engineering, recently published his findings in IEEE Sensors journal. According to a news release from UH, the cells around cancer tumors are small — ~30-150nm in diameter — and complex, and the precise detection of these exosome-carried biomarkers with molecular specificity has been elusive, until now.

"This work demonstrates, for the first time, that the strong synergy of arrayed radiative coupling and substrate undercut can enable high-performance biosensing in the visible light spectrum where high-quality, low-cost silicon detectors are readily available for point-of-care application," says Shih in the release. "The result is a remarkable sensitivity improvement, with a refractive index sensitivity increase from 207 nm/RIU to 578 nm/RIU."

Wei-Chuan Shih is a professor of electrical and computer engineering at the University of Houston's Cullen College of Engineering. Photo via UH.edu

What Shih has done is essentially restored the electric field around nanodisks, providing accessibility to an otherwise buried enhanced electric field. Nanodisks are antibody-functionalized artificial nanostructures which help capture exosomes with molecular specificity.

"We report radiatively coupled arrayed gold nanodisks on invisible substrate (AGNIS) as a label-free (no need for fluorescent labels), cost-effective, and high-performance platform for molecularly specific exosome biosensing. The AGNIS substrate has been fabricated by wafer-scale nanosphere lithography without the need for costly lithography," says Shih in the release.

This process speeds up screening of the surface proteins of exosomes for diagnostics and biomarker discovery. Current exosome profiling — which relies primarily on DNA sequencing technology, fluorescent techniques such as flow cytometry, or enzyme-linked immunosorbent assay (ELISA) — is labor-intensive and costly. Shih's goal is to amplify the signal by developing the label-free technique, lowering the cost and making diagnosis easier and equitable.

"By decorating the gold nanodisks surface with different antibodies (e.g., CD9, CD63, and CD81), label-free exosome profiling has shown increased expression of all three surface proteins in cancer-derived exosomes," said Shih. "The sensitivity for detecting exosomes is within 112-600 (exosomes/μL), which would be sufficient in many clinical applications."

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