Buying competitive advantage

Join our circle of specialists as we talk mergers and acquisitions over lunch at Houston Hall in New York’s West Village.

Video transcript

Alana Feld:
When we acquired Super Cross, the premiere motorcycle racing series, we found ourselves in the dirt business.

Joie Chen: The dirt business?

Alana Feld: In the dirt business because our shows perform on dirt.

Joie Chen: You need a lot of dirt.

Alana Feld: We need a lot of dirt.

Joie Chen: To the BIG deal in the beer business!

Joie Chen: This was really the big deal in the beverage industry but it also sets a stage and tells us something about what's happening in industry. Giant mergers and acquisitions.

Dan Tiemann: Well I think you've got companies over the last several years, they've taken a lot of cost out of their business, and now it's about, how do we continue to grow? 

Joie Chen: Feld Entertainment, Ringling Brothers. You guys have been together for a while, but you've also expanded and grown in other ways.

Alana Feld: You have to change, right? If you're not changing, you're not growing. It's really about finding something that can really fit in with what we do but also that can enhance what we do. When we acquired Monster Jam and Super Cross, we really saw an overlap with our consumers. It was an audience that we knew.

Alex Miller: Alana hits on a lot of good points, because at KPMG we tell our clients that if you don't believe you have really privileged insight, you should be really careful. A lot of the due diligence process is establishing that insight, and then building a value creation plan that really helps you achieve it.

[Factoid]  84% of M&A investors expect to initiate a deal in 2017

Dan Tiemann: The companies who do this the best are the ones that have a strategic plan. These are the markets we want to be in. These are the companies that are available in this space. But you also know when to back off, right? Because saying no is really really tough.

Deborah Jackson: Bigger is not always better.

Joie Chen: That's a hard point to make to clients, right? Bigger is not always better.

Deborah Jackson: …not always better. In history there’s a path of all these big deals that were done that did not produce the results. There are situations where these acquisitions are extremely valuable, but it's not easy.

[Factoid] 79% of M&A investors consider the US as the most attractive market for M&As

Deborah Jackson: When you have mergers how do you create a new culture going forward that works and keeps people engaged?

Alana Feld: I think for us the biggest thing was really getting the leadership on board and it really trickles down from there. 

Joie Chen: What happens when you haven't thought out that culture question?

Dan Tiemann: The talent is what made the company great and now the talent's leaving.. and before you know it, you'll create a new competitor. It's strategy first. You got to get that strategic direction. It's got to make sense.