Welcome our new M&A writer Arnav Joshi, who prepared these questions for SmartBase Solutions CEO Kris Lynch after SmartBase Solutions bought Group 3 Marketing earlier this month.
Thanks to Franklin Partners for underwriting our M&A section!
Do you expect to use this acquisition to primarily develop and introduce new offerings or to bolster existing capabilities?
The combination of the two companies will accomplish both strategies. We expanded our capabilities by obtaining some top-notch technical and marketing talent to complement our incumbent staff. Group 3 has deep expertise in developing customer
loyalty and brand loyalty programs that are data-driven, creating additional opportunities within our marketing services.
Our SmartBase IQ™ Data Platform will enable us to offer enhanced big data and analytic capabilities through the Group 3 Marketing technology, essentially supercharging the use of data in distributed marketing and marketing automation programs.
This allows us to offer services that actually put Big Data to business use in many industries, including health care, retail, life sciences, energy, financial and small business enterprises.
What piqued your interest in Group 3 and how did you originally envision the business impacting your company’s strategy? How have these views/expectations changed during the transaction process?
SmartBase is pursuing a growth strategy that includes both acquisition and organic growth. We are actively looking for opportunities to grow our business and found Group 3 met our criteria. Through the Group 3 acquisition, we acquired some great clients, personnel, and technology. As we integrate the organization, we continue to uncover opportunities to enhance our services and deliver more value for our clients.
What does the integration timeline look like? Will Group 3 continue operating as a stand-alone contributing entity for the foreseeable future, or will all relevant assets be integrated into the larger organization immediately?
We have communicated to the Group 3 clients that we will operate the business as SmartBase Solutions. Group 3 personnel have moved to SmartBase’s headquarters in the North Loop in Minneapolis. The teams have been integrated and are working on key initiatives around service delivery and technology integration. I expect to have the business fully integrated by Q1 2017 to begin the New Year ready to deliver and positioned for growth.
Will any of Group 3’s management team continue on as part of SmartBase?
Yes, SmartBase hired key Group 3 employees as part of the acquisition strategy. Once the transition is complete, we will have an integrated management and employee team responsible for the business.
What are some of the main integration challenges you expect to face?
From a cultural perspective, the two companies were aligned. I believe our main challenge right now is eliminating duplicate process and systems.
Why did SmartBase choose to begin strengthening its data-driven marketing solutions at this time?
Since the business opened in 2005, SmartBase has focused on delivering data-driven marketing solutions. Several years ago we saw a market need for more scalable database architecture and advanced analytics services. In response, we invested heavily in Big Data technology and talent, creating our SmartBase IQ™ data platform. The Group 3 Marketing acquisition gives SmartBase the opportunity to help their clients utilize and analyze all of their data to further their core focus of “Right Message, Right Channel, Right Customer, Right Time”. Together, we have a stronger position in data analytics, marketing automation and distributed marketing.