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In this network’s acquisition strategy, value alignment takes top priority.
During a recent episode of Secrets of the Top 100 Agents, Belinda Connor, general manager of residential real estate and brand at Elders, gave a glimpse into what the firm looks for when it comes to acquiring real estate agencies to become part of the Elders business.
With a spate of recent purchases, including the group that previously operated as Knight Frank Tasmania, Elders has been pursuing an aggressive strategy of growth through acquisition as well as franchise additions.
When it comes to buying a business to become part of the Elders family, Connor explained that there are a number of factors that the firm assesses to determine if the group will be a good fit.
“I won’t say we’ve got a checklist, but there are two things that we really look for,” Connor said.
According to the GM, the firm targets “high quality, usually larger scale” businesses that are located in an area where the brand has a strategic gap.
The other major factor is harder to quantify, but according to Connor is arguably the most important.
“Cultural fit is absolutely critical to us,” she said, noting that if an agency’s values don’t seem to align, the firm isn’t prepared to make a deal.
With a long running history dating back its beginnings in 1839 as an agricultural business, and a varied past that has included jam-making and beer-brewing, Elders takes the culture that it has cultivated over the many years very seriously. Noting that different personalities can have an outsized effect on how employees feel about a business, Connor said that the firm doesn’t consider it worth the risk of possibly changing the company culture by acquiring a team that might not be a good match.
“Within the real estate industry that we all work in, there can be big egos and there can be types of businesses that we don’t think would fit. So we would never prioritise the profit over what’s going to fit our values and our people,” she stated.
After all, as the firm sees it, that’s one of its biggest assets for retaining a strong, dedicated team where staff often stay at the company for decades at a time.
“I think if you speak to anyone within Elders, there’s discussion about the feeling and the vibe and the culture that is very unique. It really is like a family. And the tenure of a lot of people within Elders’ real estate business is 30, 40, 50 years. Once you’re in, you’re usually here for life, and I certainly feel that way. So having the cultural fit is really important,” she emphasised.
Of course, the financial picture of a firm is “absolutely critical” in assessing any acquisition, Connor noted, because as an ASX-listed company, Elders also takes the responsibility to its shareholders extremely seriously.
She explained that they have a dedicated mergers and acquisitions team that oversees any buyout, providing modelling for the viability of the deal, and then shepherding the new businesses through the transition process that can understandably represent quite a change for incoming team members.
To smooth the path, the firm takes a “no-surprises” approach to ensure that even the most challenging parts are expected and planned for.
Factors like migrating all the data to a new CRM and switching out the signboards are all accounted for, with Connor noting they prepare incoming businesses for “the good, the bad and the ugly”.
She describes that upfront approach as integral to the success of its recent strategy.
“If we sell the vendor a dream or a reality that we can’t fulfil, then that’s just not going to work,” she acknowledged.
With several more major acquisitions hinted to be revealed this year, Connor noted there is “never a dull moment” in the real estate arm of the major national brand.
Listen to the full episode here.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
