Companies make acquisitions for a host of reasons. Sometimes it’s about filling a hole in a product road map, or expanding market share, or finding good people.
Finding the right company to acquire takes special talent. But once the deal is through, it takes skill and a deft hand to integrate the acquired company smoothly into the mothership without losing key talent or making its staff feel like they have gone from building something great to being cogs in a huge machine.
The acquirer has to decide whether to incorporate their culture into the acquired company or let it maintain its own culture and identity. It can be a difficult line to walk, and the success of the transaction can often hinge on how well the cultural integration is carried out.
Beyond culture and people, though, there is also a critical nuts-and-bolts side to acquisitions. Do you keep the same benefits and compensation packages in place, or do you move people to new plans? That process can be disruptive for employees. Worst of all, do you lay people off?
Then there’s tooling. Each company has its own way of doing things, and has unique tools used by sales and marketing, HR and finance. The acquirer and acquired company have to sit down and decide which tools they will keep or abandon without making the smaller firm feel like it’s a “my way or the highway” situation — unless that’s how you do business.
It’s a balancing act. If you care to make the company you’re acquiring feel part of the team rather than a bolted-on component, the entire exercise will get harder.
In an effort to answer all these questions, we’re examining how good acquisitions work in a two-part series. For this first part, we spoke to executives from three companies that have made many acquisitions to get their take on the process and how they ensure the post-deal integration goes smoothly.
In the next part, we will feature executives from three companies that were acquired by the same organizations.
It’s worth noting that everyone involved here is trying to put their best foot forward, and nobody is going to air any dirty laundry on either side of the acquisition equation. The goal of these articles is to learn what the process is like for each side of the transaction, and just how much of a challenge this whole undertaking can be after the contracts are signed and the checks clear.
Looking for the right company
While there isn’t necessarily a formula for finding good companies, the executives we spoke to all discussed a process that they have developed over time based on their experiences acquiring companies.
Ashley Andersen Zantop, COO at edtech firm Cambium Learning Group, has been involved in a number of acquisitions in her time with the company. She said Cambium has pursued an acquisition strategy over the years to complement the company’s organic growth, and for starters, a good fit would be digital edtech businesses aimed at the K-12 market.
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January 26, 2022 at 05:30AM
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Hard cash and soft skills: How to successfully manage an acquisition - TechCrunch
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