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64 One topic that never eludes the mortgage industry is mergers and acquisitions (M&A) between companies. As a 33-year mortgage industry veteran, I have been part of no less than eight M&As in the span of my career. Several of those M&As have included some of the biggest names in the industry. I have worked for two companies in which I was involved in the merger and acquisition strategies, including the Bank of America and NationsBank merger, and Centex Homes selling their sub-prime mortgage arm to Fortress Investments group, which is now known as NationStar Mortgage. Mergers occur when two separate companies join forces to form one company, and acquisitions is best described as one company taking over another company. For the mortgage banking industry, whether the housing market is good or bad, the mergers and acquisitions discussion is always present as companies consistently look for opportunities to grow, diversify and/or simply survive. For many, the discussion of being the acquirer or the company acquired in any industry brings excitement, fear, uncertainty and anxiety. Let's first take a look at the reasons why companies get involved with mergers and acquisitions, and then we will narrow this topic down to the mortgage industry specifically. Business academics, tenured executives, and companies specializing in mergers and acquisitions commonly say the highest potential to maximize the return on investment associated with an M&A is to make sure the involved companies are philosophically and culturally compatible. ink of it this way: What if the executives of a 100-year old bank, who wear suits to work every day, show up to work in an office five days a week, and work for eight to nine hours a day, decides to acquire an online mortgage company? e online mortgage company's executives basically work from their homes three to four days a week, and when they do show up at the office, they wear shorts and t-shirts. ey do put in hours, but these hours are mostly at their leisure—maybe they take afternoons off to play a round of golf every other day. Can you see where the cultural dynamics of these two companies might be an issue? Integrating cultures requires a strong knowledge of each company's culture. If there are vast differences in cultures, a strategy C O V E R S T O R Y / B R I A N D A I L Y WHO'S NEXT? The industry combines forces through mergers and acquisitions. 64