Over the past 12 months, no fewer than 6 companies within Juvo’s customer base have been the subject of an acquisition. This can sometimes be good news for us if the acquiring company has no current TEM partner, or bad news if they’re already very happy with their current provider. For the sake of this discussion, what does it say when your customers are being acquired at a seemingly rapid rate? Are there lessons to be learned, insights to be gleaned?
First and foremost, M&A activity typically signals a strong economy. As it pertains to our customers in particular, we believe that having a TEM like Juvo is a signal of many other positives on the part of any business. For example, if a company has reaped the benefits of a TEM, and has sought to streamline operations within this area, it stands to reason that they have done, or will do the same in other functional areas.
The above seems rather straightforward, but doing a bit more digging into the customers of ours being acquired, there appears to be a much bigger link amongst all of them: a singular focus with regards to their service offering. From nursing homes to banks to corporate training: these companies being acquired are highly focused, and therefore highly attractive to buyers. The particulars of the acquisition are presumably simple because the value of the company isn’t spread out over multiple divisions, affiliates, or offerings.
Most business leaders don’t start their day with the hope of a broker stopping by the office to discuss a possible merger or acquisition. The customers of ours who have been acquired haven’t been out actively seeking a possible suitor. They’ve been sought out because they have managed to create value for customers, and that value is reflected in their balance sheet.
We can all be tempted to chase the shiny object, the “can’t miss” concept, but there is a fine line between adjacent or complimentary service offerings that we know customers need, versus ancillary services that we hope customers want. Those companies who can make this distinction will always be valuable.