When it comes around

It's difficult to pinpoint exactly when the trend began to shift directions. All we know is that one day a merger or acquisition was hailed as a sign of strength, a power play for companies on both sides of the table. If you could buy, you were hearty and bloodthirsty and trying to make yourself whole. If you sold, you were perceived not as weak and injured but as tactically smart. You clearly were planning to flip what you held all along, and you had just accomplished what you set out to do.

But another day not long after that, the same kind of deal was branded as a bailout, a fire sale. Suddenly you were a bargain shopper if you were a buyer, and if you were for sale, well, then there must have been something wrong with you. Maybe your business plan proved precipitous or maybe your cash flow dried up and your backers bailed. Maybe the corner you coveted didn't prove quite so lucrative after all. Whatever — you were damaged goods. Now you had to sell off what you had to make paybacks to those you had promised. Now you weren't fulfilling a destiny—you were just cutting bait and calling the whole thing off.

There never really was a middle, which really is the whole problem. In retrospect.

There was maybe a little talk here and there: We took note that this or that company was on an acquisition binge, buying everything in sight whether it seemed to fit or not. We were curious whether anyone really understood why this company bought what they bought. We wondered what they were going to do with it. We paused to question their logic but decided, ultimately, that they must know what they're doing. The integration question crossed our minds, and we asked them how they would make it all work. We believed the answers.

We bought the stories about synergy. We gave everyone the benefit of the doubt. We rode a wave we thought would never crest, a bubble we were sure could never burst. It was all part of the game, at the time. It was what was, and it wasn't any different from what anyone else was doing.

We get it now: That much is clear. Now the questions about value and logic and integration are reflexive at the first sign of an acquisition or merger or buyout. What's in it for us? What could stop us from making it all fit together, and how will we overcome those challenges? Is this something we really need?

That means, really, that the necessary middle came too close to the end, too late. Too late to make right what went wrong before, that is, but maybe early enough to prevent things from going wrong again. (For those still around, anyway — and those that have emerged with the resources to scrounge and bargain-hunt and collect and regroup and retry.)

That means that maybe the trend is shifting again, only this time everyone's more conscious of it because of what we've just been through. It's happening a little at a time. Just last week it did, with CEOs smiling and clinking glasses and talking up how much time they spent making sure this was the right thing to do for all involved and bad for the competition (which didn't much help the cause on The Street, so far, but maybe this is just a start).

So if few were able to pinpoint when things started to shift the first time, maybe we'll all be more aware of it now. And we'll benefit from the prescience. We'll be able to say it was right then that it started to happen — that this deal or that (and it isn't one that has happened yet) is the one that started things going the other way, and this is why. And it will stay that way, and we'll understand better why it happens the way it does.

For a while. And then it will happen all over again.
Contact Jason Meyers at jmeyers@primediabusiness.com.