A Failed Merger Becomes A Blessing for Stuyvesant
“It made sense to merge—compose, design, print and distribute all under one roof,” says Roesch. “I didn’t want to sell the business. But it seemed like the best thing to do.”
Soon though, Roesch says he realized it was the worst thing he could have done. Without going into detail for legal reasons, Roesch says there was extreme “incompatibility of management and opinions.”
Roesch claims the new partner (nearly four times larger than SPI) had size on its side, and numerous changes were immediately made—changes not previously agreed upon or even discussed before signing the contract. That’s why Roesch gives this warning to companies interested in mergers: Get to know your potential partner—and get everything in writing.
“There are real dangers in verbal agreements,” he warns emphatically. “Every word must be written into the contract. If you’re going to merge, it’s absolutely imperative to know the people and company with which you’re merging. Find out all you can about that business—its ethics and policies. Ask the employees, customers and other businesses how they feel about that company. Do your homework. A merger is a marriage, and a split-up can be as nasty as any divorce.”
Most importantly, Roesch cautions, “Make the proper provisions in the contract. Provide a clause that clearly states that if after six months, things aren’t working out, either party can back out.”
It took 18 months for the Stuyvesant merger to “dissolve by default,” says Roesch, explaining he was eventually “bought out” of the contract.
Roesch had a check in hand, but he no longer owned any equipment. But he did own the company’s name—and the building where Stuyvesant was located. As landlord, he immediately evicted the tenants—his ex-partners at the mailing house.
Ousted from the facility, the mailing house packed up all the equipment, computers and furniture, and vacated the premises, closing the doors behind them. Within a month, the doors were reopened by Roesch, who walked back in—in a grand fashion.