Cultivating growth through expansion
For one US agribusiness, the seeds for continued success lay in M&A
COULD ANYONE EASE
THE SHOCK OF TRANSITION
FOR TARGET COMPANY EMPLOYEES?
The Situation
If you want to grow something, you need to be sure conditions are right, then tend them closely over time. This principle applies as much to business as to barley, and it’s one that a US-based agribusiness had successfully applied over decades of production, diversification, and vertical integration. Then recently, in a bid to stay ahead of climate-induced shifts in agriculture, company leaders sought growth beyond their borders.
The seed for that growth: acquiring a foreign agricultural retailer (a provider of products and services to growers). This retailer was geographically remote and organizationally small but had a significant footprint in a strategically important region. The conditions for the growth to be successful: integrating the retailer’s people, processes, and customers into a much larger organization.
Mergers and acquisitions (M&A) are complicated enough; they’re even more so when different governments, laws, regulatory bodies, currencies—even units of measure—are involved. The upsides were clear: new markets, a climate hedge, supply chain efficiencies. So were the risks—many of them cultural.
The transition from a 150-employee company to a multinational corporation could be a shock to the employees and the growers. Then, too, ag is an especially relationship-driven sector, in which the bond between growers and their agronomists and crop advisers is both personal and central to the business. This made the retailer’s employees as integral as the products they sold—if they left, their clients would likely follow.
Employee retention and organization design would clearly be high priorities in this acquisition. For an assist, the retailer engaged professionals from Deloitte’s Mergers, Acquisitions, and Restructuring practice.
THE SOLVE
IF TARGET COMPANY EMPLOYEES LEFT,
GROWERS WOULD LIKELY FOLLOW.
The Impact
Leadership on both sides deemed the integration a success, lauding the Deloitte team’s hands-on, white glove approach. The project’s impact was profound, immediate, and measurable: a successful deal announcement and issue-free Day One for approximately 150 employees across 15 locations, with 100% of conveying employees accepting offers to join the company.
“New” employees were warmly welcomed into the organization, providing opportunities for advancement and continued success. Growers retained their trusted advisers, while gaining access to state-of-the-art resources and experience from the US side of the company. Local communities also benefited from the organization’s continued commitment as a corporate citizen, building on the strong local relationships of the acquired company.
The US company significantly expanded its footprint, using the acquired business as a robust platform for growth in a geography of increasing strategic importance to the ag sector.
Meanwhile, the Deloitte team’s humble, collaborative approach earned them the privilege of being, in the words of one leader, the firm’s “first and last call” for M&A advice—demonstrating what growers everywhere already know: Organic growth may happen with effort, but for truly bountiful returns, an assist can make all the difference.