1-800-Flowers acquired Harry & David for $143 million in 2014. Conducting a buy-side merger and acquisition starts with an understanding of the industry key players and future trends (Investment BankCom, 2016). 1-800-Flowers must have conducted an in-depth search and screening of potential targets based on parameters such as supplements, complements and asset requirements (Investment BankCom, 2016). The search and screening involves searching for information about potential targets in publications, websites, databases, and any other credible source in order to learn more about the target (Investment BankCom, 2016). 1-800-Flowers in their press release gave their reasons for choosing Harry and David as a target to be as follows:
A large customer database consisting of both corporate and consumer accounts
A website with a large and growing customer traffic
A unique collection of proprietary gift products and brands that have strong customer loyalty (McCarthy, 2014)
A strong operational infrastructure with a geographically dispersed manufacturing, warehousing and distribution facilities (McCarthy, 2014)
A pool of highly talented workforce
After satisfactory search and screening of potential targets, 1-800-Flowers sought to establish contact with Harry & David. Some of the possible ways they could have established contact was through direct contacts made at trade fairs and industry-specific exhibitions, or through a reach–out to the Trade associations (Investment BankCom, 2016). Once contact was established, 1-800-Flowers must have made a follow up probably through a phone call that lead to several rounds of negotiations. During the negotiation process, 1-800-Flowers had to be aware of some of the common mistakes buyers make including paying a too high price for the target, failing to have proper plan for integration, and not understanding the target company or the industry business model.
Works Cited
Investment BankCom. "Search & Screen Parameters for Buy-Side Mergers and
Acquisitions." InvestmentBankcom. 2016. Web. 23 Feb. 2016.
McCarthy, Erin. "1-800-Flowers to Acquire Harry & David for $143 Million." WSJ. 2 Sept.
2014. Web. 23 Feb. 2016.
