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The Importance of a Brand in M&A Success


Creating a brand is an incredibly important facet of building a successful business. The brand is so much more than a name, logo, and some colors. A truly successful brand incorporates the business’s purpose, goals, people, and values. Brands often convey a specific message, and consumers begin to associate certain characteristics and attributes with those brands. Although it is clearly difficult to precisely define a company’s brand and quantify its value, building and protecting a brand must occur to really connect with the customer base. Companies that manage to tout a successful brand are often the targets for mergers and acquisitions (M&A) because of the opportunities that they clearly present. Here is the role a brand can play in M&A success:


Identifying the Heart of the Brand

In order to capitalize on a company brand for the sake of sourcing a good investment, it is important that the company itself recognize the unique aspect of its brand that resonates with consumers. In many cases, outside companies will have their own perception of another company’s brand, but that does not mean that it aligns with the other company’s internal view. To get the ball rolling on a prospective merger or acquisition, understanding and portraying the value of the brand may prove critical in eliciting an enticing offer. In addition, it is critical for a company to ensure that any potential purchasers have a correct understanding of the brand and how it connects to the profitability of the business, otherwise those buyers may end up dissatisfied or the brand may be damaged in the process.

Using the Brand to Create Value

The key to cultivating a good brand is being able to utilize it to create value for the company and any shareholders. Because a company brand is an intangible asset, it can be difficult to build and maintain. And, there are plenty of instances in which a public relations disaster can essentially result in brand suicide. Of course, companies with longstanding brand success tend to be the ones that snatch up other companies, but there are of course fledgling brands that are often worth pursuing. Ultimately, any company with a strong brand has much to gain from joining forces with similar successful enterprises to allow for the amalgamation of people, products, and services. Combining forces like this, especially when one or both companies already have a strong foothold with its consumer base, can create countless lucrative opportunities.

Building a Bridge Between Brands

Of course, if there are competing brands at play when the M&A transaction begins to coalesce and eventually comes to fruition, it will be necessary to figure out how to build a strong and logical bridge between the two. Depending on the niche of each entity, it may be necessary to retain the individual brands while showing how there is synergy between them and/or determine how to create an overarching brand that encompasses the values of both. The successful merging of businesses takes time and diligent planning, and when a valuable brand is at stake it is important not to allow that to fall by the wayside.

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