Acquisitions are made for a variety of reasons by businesses. It is sometimes about filling a gap in a product roadmap, increasing market share, or hiring good individuals. It takes a specific skill to find the perfect firm to buy. However, once the deal is done, it takes ability and dexterity to seamlessly integrate the acquired company into the mothership without losing important talent or making its employees feel like they have gone from developing something wonderful to cogs in a massive machine.
The acquirer must decide whether to infuse their culture into the acquired firm or allow it to retain its own culture and identity. It is a fine line to walk, and the success of the deal is typically determined by how successfully the cultural blending handled. Acquisitions have a key nuts-and-bolts aspect that goes beyond culture and people. Do you maintain them on their current benefits and compensation packages, or do you switch them to new ones? Employees may be inconvenienced as a result of this procedure. Worst of all, do you fire employees?
Then there is the matter of tooling. Each business has its own style of doing things, as well as its own set of tools for sales, marketing, HR, and finance. Without making the smaller firm feel like it’s a “my way or the highway” situation — unless that’s how you conduct business — the acquirer and acquired company must get down and select which tools they will keep or abandon. It is a delicate art of balance. The entire process will become more difficult if you want the company you are buying to feel like a natural extension of the team rather than an afterthought.
In order to answer all of these questions, we are doing a two-part series on how smart acquisitions operate. In this first section, we met with leaders from three organizations that have completed numerous acquisitions to obtain their perspective on the process and how they ensure successful post-acquisition integration. Executives from three companies that bought by the same organizations will be featured in the next section.
It is important emphasizing that everyone engaged is putting their best foot forward, and no one on either side of the acquisition equation is willing to air any bad linen. The purpose of these articles is to understand about the process from either side of the transaction, as well as how difficult it can be once the contracts signed and the checks cashed.
Trying to find the appropriate business, while there is not necessarily a formula for finding good companies, the executives we spoke with all talked about a method they have established over time based on their acquisition experiences. Ashley Andersen Zantop, COO of Cambium Learning Group, has been involved in a number of acquisitions during her time there. She explained that Cambium has followed an acquisition strategy to supplement the company’s organic development throughout the years and that for starts, digital edtech enterprises focusing on the K-12 market would be a suitable fit.