When Porter Raulston, the CEO of Rain Dance Irrigation and Lighting Company, met with Jack Hatcher, the principal partner in Hatcher-Deerfield, Inc., a consulting firm specializing in organizational planning, development and governance, he was interested in a new venture. Hatcher's idea was to combine Raulston's business with two other businesses landscaping and construction--to form a new entity to serve as a one-stop shop for the homeowner. Their new company, Rain Dance Property Solutions, would merge the three companies and entrepreneurs and could even result in a template for future franchising in other markets beyond Chattanooga, TN. The case explores the merger process as well as strategic planning, mission statement development and goal setting for the new entity.
The primary subject matter of this case concerns issues faced when merging three entrepreneurial companies. Secondary issues examined include ways to value merging companies, issues in combining operations, employees, and managers into one entity, and personality issues involved in such an endeavor with traditional entrepreneur/owners. The case has a difficulty level of three and four--appropriate for junior and senior-level undergraduate students. The case is designed to be taught in one class period and is expected to require one to two hours of outside preparation by students.
In May, 2006, Porter Raulston, the CEO of Rain Dance Irrigation and Lighting Company, made an appointment with Jack Hatcher, the principal partner in Hatcher-Deerfield, Inc., a consulting firm specializing in organizational planning, development and governance. Raulston and Hatcher had been acquaintances for many years and Hatcher had been a long-time client of Raulston's company, the state's largest residential and commercial sprinkler system and outdoor environmental lighting enterprise.
When scheduling the appointment, with Hatcher, Raulston indicated he was searching for a new entrepreneurial venture and needed help identifying, formulating, and implementing that idea. Raulston did not know precisely what he had in mind for a "new entrepreneurial venture," but he had maximized the financial potential of his current business and was interested in making changes. In his early fifties, Raulston was a personable, low-key individual who had started his business over twenty years ago. His primary role had always been external, focusing on sales and customer relations. Raulston relied on his employees to oversee the operations of the company while he provided only cursory oversight activities.
Ralston had come to the right person. Hatcher, in his late forties, was the epitome of a successful entrepreneur. Before starting his own business, he worked in a variety of industries to gain practical business experience, ultimately holding key management positions in the Jack Eckerd Corporation, the Chicago Tribune Company, and Salem Carpet Mills, Inc. With a background that included both staff and line positions and many intrapreneurial accomplishments for his former employers, Hatcher opened his own consulting firm in 1999 focusing on organizational development products. His firm's stated purpose not withstanding, Hatcher took advantage of his entrepreneurial skills by starting more than a dozen new ventures that ultimately were profitably harvested.
During their May, 2006 meeting, Hatcher helped Raulston develop an in-depth analysis of his business in terms of potential opportunities. During the next few months, which were typically during his busy season Raulston had little time to do more than review the information and strategies that resulted from his conversation with Hatcher.
In September, 2006, completely independent of his conversations with Hatcher, Raulston received a telephone call from Ed Britton. Britton, also in his early fifties, was the founder of River City Lawn and Landscaping, Inc., a commercial landscaping and exterior maintenance company. Britton had been Raulston's vendor on numerous projects and the two were well acquainted both personally and professionally. In addition to his landscaping company, Britton created www.ChattanoogaHasBids.com, an Internet based site connecting qualified exterior maintenance contractors to a list of potential customers in the local Chattanooga, TN area. He had a number of customers in the more affluent Lookout Mountain community. Prior to his current business, Britton had started several companies that provided a variety of maintenance-related services. All had experienced limited success and were of a short-term nature. In addition, all were primarily "virtual" operations that relied heavily on subcontractors. Other than a minimum amount of capital equipment, these "virtual" businesses required almost no physical infrastructure.
Britton came straight to the point. He wanted their companies to merge to create a comprehensive one-stop residential and commercial lawn care and landscaping service. Britton's proposal echoed one of the entrepreneurial strategies Hatcher had previously suggested to Raulston. The two decided Hatcher was the logical resource to help them develop their new enterprise. The first meeting was in October 2006, followed by three monthly meetings during October, November and …