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Editor's Points-The Acquisition Age

August 1, 2007
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Are we experiencing the Incredible Shrinking Industry? Many mergers and acquisitions (M&As) and partnerships have occurred in the surveying arena in recent years. In my eight-year tenure, I can think of a couple dozen offhand.

Are these strategic business moves good for the profession? Usually, yes, but it depends on many factors, including the business intent and follow-through, and customer focus. Numerous groups demonstrate success from mergers and acquisitions while others fall short of their promises to their clientele and the industry served.

End users also need to consider how these business moves may effect them--and how they might improve their businesses. Many surveyors prefer the intimate businesses of yesterday--the “mom and pop shoppes.” But the companies and manufacturers making the acquisitions in today’s market are moving away from this model as competition becomes more fierce; therefore, surveyors will have to learn to work with multi-faceted manufacturers and suppliers. Fortunately, some recent acquisitions have been created to focus on local business, including sales, rentals, technical support and repair services (for example, see “More Feet on the Street” on page 20 of this issue and “A Precise Movement” on page 18 of our July issue). With precise positioning technology advancing so rapidly, these growing manufacturers are realizing the importance of local support “at the ready” as well as regular, efficient and effective product and technology training.

So once surveyors get past the fact that there are fewer yet broader-based, more multi-faceted industry suppliers overall, they can focus on their real concerns--the ones that effect their business. What are surveyors’ greatest concerns? According to our recent informal quick poll on www.pobonline.com, they include product and service offerings and prices, customer support, and service and repair.

These concerns are very valid. But ironically, the M&As and partnerships that surveyors are apprehensive about are often just the thing to address these concerns. One company in a partnership that may not have been particularly strong in certain areas can build from the strengths of another. Smaller companies that are sold to larger ones can benefit from the additional capital and increase R&D as well as product and service offerings. Oftentimes, the acquired company maintains “business as usual” while having the advantage of more capital from the acquiring company. It then conducts “business better than usual.” And if the acquired companies retain their key leaders, much of the integrity of the business stays intact.

Product price is another grave concern for surveyors. The majority of the surveying businesses out there are small outfits with fewer than 10 employees. This doesn’t necessarily mean that they are not profitable or without money, but many do not have the assets that larger or multi-disciplined companies do. So their concern about industry M&As is whether prices will go up as competition lessens. This is something for the acquiring companies to consider in their overall business scope.

A common perspective among surveyors is that smaller companies are more innovative. This again goes back to the concept of retaining core principals and technicians from the acquired companies to maintain the level of innovation. Surveyors should recognize, however, that technology is changing so rapidly that larger companies with more capital hire only the best scientists, developers and technicians to produce quality products.

All in all, mergers, partnerships and acquisitions will likely succeed if customers are the focus. Surveyors should view these strategic business moves as potentially good for their businesses--especially since it’s unlikely that the trend will stop altogether anytime soon. I expect to be adding to my list of M&As in the coming years.

To contact the editor, send an E-mail to hohnerl@bnpmedia.com.



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