Business newspapers are part of your daily breakfast routine. Your senior team members research acquisition prospects. You have capital to grow your company. You create The List – emerging technology companies which are likely to be successful acquisition prospects.
You attend tradeshows and invest time in networking with the leaders of companies on The List. Since you are in the high tech industry, you even post your acquisition strategy on your website, like Dell (see their website).
Meanwhile, successful emerging technology companies that fill a niche in your world are thinking strategically and long-term about the sustainability and survival of their product. Along with other options, acquisition is on the table. With available capital and a bit of courting and charm, you could be the one who convinces the right company to allow you to acquire them.
Knocking on the door of the right start-up, your company offers a compatible corporate culture, capitalization, and the chance for the new product to survive and, indeed, thrive. Two other attractive potential acquisition partners offer competitive packages.
But you have spent the most time talking to the CEOs. One in particular demonstrates enthusiasm and compatibility. Your own enthusiasm for acquiring this company grows.
Acquisitive companies have a replicable strategy for future investment and growth. Like Intuit, you may end up acquiring several exciting new companies and that company’s talent. Just this year alone, Intuit has acquired five acquisitions, and a team of talent with each one. It’s latest acquisition, Level Up Analytics, brought with it a “rock star group” of 14 employees.
From strategic and financial reviews of your target company to integration execution and leadership, companies need to develop and sustain relationships cross-company while at the same time delving into the analytic details that translate into a successful acquisition.
While relationship building with potential acquisitions is often the difference between getting the deal done, the less glamorous details such as resolving power struggles, paying too much, poor acquisition integration, and other pitfalls will derail your acquisition. Acquisitions are costly and failures even costlier, both in terms of dollars and reputation.