Pr Strategy

Special Report

PR Professionals as Assets: Communication Is Key During Distressed Mergers and Acquisitions
BY DAVID SILVER, APR

Corporate America continues to struggle in 2009, with the financial system experiencing chaotic swings. The consumer credit market is tattered. Many financial institutions remain clogged with bad loans and other distressed assets as American executives and employees wonder what the future holds. We are living in a new publicprivate paradigm with corporate icons such as Bear Stearns, Merrill Lynch and Citigroup having to be rescued by a government bailout or taken over in a merger and acquisition by competitors for cents on the dollar. Even powerful buyout firms such as Kohlberg Kravis Roberts & Co., Bain Capital and THL Partners have seen their acquisitions go sour. The importance of communication Many variables drive mergers and acquisitions, especially in recessive markets. In 2009, several corporations will come to see mergers as alternatives to bankruptcy, and reorganization as an important exit strategy. In assessing the economics of an acquisition, many factors must be considered, such as irreconcilable conflicts, dilution of profitability from declining market shares and weak financial performance. But in this turbulent global marketplace,

communications is a key indicator for a successful merger and acquisition. “Communication is crucial in a distressed merger and acquisition situation, because you have a number of audiences who need to know what is happening, including customers, investors, employees, boards of directors and management,” says Lindsey Alley, managing partner at Houlihan Lokey, the largest merger and acquisitions investment bank adviser for U.S. transactions up to $1.25 billion. Working with attorneys and investment bankers, PR professionals can be tremendous assets in helping to develop communications strategies for the court of public opinion in a distraught merger or acquisition. Maintaining a... [continues]

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