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With Mergers and Acquisitions, Culture Trumps Finances

The rebounding residential real estate market means rebounding mergers and acquisitions. What are buyers looking for?

(Boonton, NJ, March 28, 2014) — As the housing market rebounds, mergers and acquisitions have accelerated.

One especially acquisitive broker is Howard Hanna Real Estate Services of Pittsburgh. In the latest deal in a string of acquisitions, it bought the 700-agent William E. Wood and Associates of Virginia.

Mergers are always risky, notes Howard W. “Hoby” Hanna IV, president of Howard Hanna Midwest Region. Alienate the acquired company’s agents, and you can quickly lose the very reason you paid a premium for the company.

To lessen that risk, Hanna aims to learn as much as he can about a company he’s thinking of acquiring. He talks to agents in the market and even trolls blogs for telltale comments about a company’s culture.

It’s become something of a cliché in the business world, but culture makes or breaks business combinations. One clue Hanna looks for is how a company’s owner talks about his agents. If the broker seems to distrust his agents or view them as the enemy, Hanna keeps looking.

Sifting through those sorts of cultural clues is the trickiest part of due diligence. By contrast, examining the financial statements seems simple.

More on the upswing in mergers and acquisitions and what buyers and sellers are looking for appears in the March issue of “Real Estate Broker’s Insider.”

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