As innovative as your team may be, your next superstar product line may not come from internal sources. 

It might come courtesy of the U.S. Postal Service.

That’s how I was introduced to ESPRO, a stain-fighting detergent company headquartered about 1,000 miles from my office. 

A corporate representative sent me an introductory letter and flyer out of the blue. No bankers. No books. The minimalist nature of the appeal piqued my interest and started the ball rolling toward what would become Jelmar’s first acquisition.

Of course, adding another member to the family of CLR Brands didn’t happen without forethought. Sure, ESPRO seemed like a natural extension of our product suite. It offered existing distribution through one of our longtime customers and promising visibility in the specialty section of a new aisle—without cannibalizing our existing sales. 

And who wouldn’t want a bigger piece of the dynamically growing $59 billion cleaning products pie? However, the decision to make an offer weighed on us.

ESPRO was a small company. We couldn’t do a lot of research beyond reviewing profit and loss statements, testing its formula’s efficacy, and checking online reviews. Nevertheless, we conducted our due diligence and concluded that a merger made sense. 

Thus began our journey into the brand and product acquisitions marketplace, valued at roughly $3.9 trillion globally in 2018 and growing.

The Trouble With Acquisitions

We’re hardly the only business to acquire and absorb another entity in the past year. From September 2018 to September 2019, more than 12,000 similar deals took place in the United States alone.

Often, mergers enable companies to scale rapidly or to move into untapped verticals. They may even pave the way for competitors to team up and win more together. Yet anyone with an ounce of cautionary blood knows that acquisitions aren’t sure things. About half of them are destined to crumble because—let’s face it—even minuscule change can be rough on your cash flow.

For us, the stumbling blocks included some predictable issues—and a few surprises. First, we knew that ESPRO’s product was made in Atlanta, which is quite far from our offices in Skokie, Illinois. 

We thought we would develop a working relationship with another co-packer, but we discovered that its communication style and ours didn’t match. While working with another company in that respect didn’t pan out, we were able to move production to our facility successfully.

Another hurdle was figuring out how to work through ESPRO’s inventory so we could switch to new packaging that would align with the rest of our product lines and consumer needs. So far, so good, but we’re not out of the woods yet. 

The good news is we can see the light, and we’re increasing sales consistently. Despite the snags of determining how to thrive in cross-functional teams, these are positive signs that we’re beginning to power ahead.

Will we experience other growing pains along the way? Most definitely. Regardless, I’m looking forward to continuing our mergers and acquisitions education and sharing what we’ve found along the way.

How to Master the Art of Acquisitions

If you’ve contemplated acquiring a new company, product line, or brand, take the following suggestions to heart. They’ll help you stay focused as you navigate difficult decisions with no clear solutions.

1. Slow and steady wins the race

My parents always taught me not to bite off more than I could chew. That’s probably why I waited so long to acquire another company. Far too many leaders acquire huge businesses only to find themselves swimming in unnecessary risks. It’s tempting to get big as soon as possible, but it comes with a price.

I might want to grab as much of the almost $117 billion laundry detergent submarket as I can, but it would be unwise to do it all at once. I want to maintain as much control of any acquisition as possible, and I can’t do that if I’m juggling multiple new brands. Taking a more methodical approach—ongoing business planning and strategic planning—allows me and my team to make solid decisions and avoid getting sidelined by unexpected issues.

2. Know when to bet and when to fold

You can’t avoid risk when you buy a company, so stop trying to find the perfect deal. I always caution against “paralysis by analysis,” which is an overwhelming fear that you shouldn’t do anything until you are 100% certain of success. 

Even if you comb over the potential acquisition’s books and business plan and take all the necessary steps, you can still experience mishaps. Instead of analyzing every last detail, you may have to take a deep breath and dive in.

On the other hand, don’t be afraid to walk away from a deal that isn’t right for you. Remember that the other company could end up pulling the plug at the last minute anyway. Don’t get offended: It’s simply business. Timing is everything, and it’s never a good idea to force something that isn’t right.

3. Give your team as much voice as possible

The moment an inkling of acquisition talk gets out among your people, you’ll hear the buzz. Unless you signed a nondisclosure agreement that prevents you from saying anything, you should involve your team members in the process instead of letting them speculate. 

Engage them while abiding by any NDA rules, and they’ll be better prepared for the experience.

My team has benefited from being involved in certain aspects of the ESPRO acquisition. They’ve improved their problem-solving abilities and gotten a better sense of the big picture as it relates to Jelmar’s future. 

I would rather communicate too much than lose a bundle because my team members struggled to find their place during and after an acquisition. Workplace misunderstandings are estimated to cost companies $37 billion annually — our company can’t afford to throw away money, and neither can yours. Consequently, keep the discussion open to all team members.

Now that we’re on the other side of our first acquisition, I’m eager to see what happens next. Who knows? Tomorrow’s mail might deliver much more than invoices and magazines.