Small business: Mergers and acquisitions - gardyneHOLT story

Malcolm Dale and Fraser Gardyne. Photo / Supplied

Design company, gardyneHOLT has been through two successful company mergers in the past eight years. Fraser Gardyne talks to Gill South about the challenges and benefits of merging two enterprises.

Two mergers

Our first merger was between myself and fellow director Michael Holt more than six years ago. We both had our own mature design businesses but Michael's company was perceived to be more production led, whereas mine was more design-orientated. The second merger took place soon after the global downturn, between gardyneHOLT and fellow design company Jag Creative in 2011.

The benefits

Our mergers have allowed each company to take advantage of each other's skill sets and provide a better offering to its existing and potential clients. The merger between gardyneHOLT and Jag Creative was at a time when both businesses were combatting a very tough economic downturn. Sadly, the most natural reaction for most companies during a recession is to slash and burn marketing spending and we, along with the majority of design companies around us were hit hard with corporate and local governments dramatically reducing perceived "discretionary" spending.

Savings

The merger allowed us to save on the costs of having two building leases and business structures during the recession, while at the same time adding more skills to support both businesses. It's been a win-win scenario for both companies and we are both in a better position now than we were before the recession. Our client numbers were around 136 before the financial crisis in 1998. We are now sitting at a comfortable 180 client base with both revenue and profitability up.

Reasons for success

In an extremely competitive marketplace, the reason we have been successful both during the upturn and downturn, is that we have continued to diversify and enhance our skills by building on a great team of skilled practitioners who can now provide a wider range of experience and capability under one roof.

The hard bits

The latest merger with Jag went really smoothly with the only challenge being to overcome equipment compatibility. Essentially Jag was using a Mac based system and we were largely PC based and there are differences between the two when bringing up and working on old files. However, this wasn't an unexpected challenge and we have largely resolved it in a way that is satisfactory to both parties.

Best advice

The biggest thing is to make sure the people and personalities within the two businesses are compatible. We have been lucky in that respect because we have all worked well together. But it is really important that you take a merger step by step so you get to know each other before you commit to a full company merger. Often it isn't until you have been working with someone for a few months that you find out if you rub up each other the wrong way.