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Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

"Not only do technology businesses need to attain bigger scale, obtain enabling technology and recruit talented, qualified people, they have to do it faster and more efficiently that their competitors." ~ Tim Miller

 

Two Types of Acquisitions

  • Traditional or Synergistic Acquisitions taking over of one established corporation by another; main objectives reducing costs through consolidating duplicate operations; increasing revenues and customer base.

  • Venture Acquisitions complement or substitute for research and product development; main objectives enhancing product portfolio; entering new markets; acquiring and retaining talented and motivated people.

 

Reasons Why 2/3 of Traditional Acquisitions Do Not Deliver Expected Results1

  • too high aspirations from the very beginning

  • companies turn to be less compatible than had been hoped

  • both the acquirer and the acquired underestimate the difficulty of integrating operations and bringing together contrasting corporate cultures

Joint Venture Venture Acquisitions Synergy 1000ventures.com Ten3 Business e-Coach: why, what, and how

Strategic Partnerships

Getting People Issues Right in Mergers and Acquisitions

Strategic Alliances

Structuring a Strategic Alliance: 10 Questions To Answer

Joint Ventures

Causes for Joint Venture Failure

Forming a Successful Joint Venture

Venture Acquisitions

Acquisition Letter Sample: Acquisition Funding Request

Buying a Small Business: Determining the Value

Case Studies

Acquisitions Abroad by Indian Companies

Why Mergers & Acquisitions?

The role of mergers and acquisitions has evolved as a strategy tool for fast-track technology-led companies. In the current rapidly changing environment and in the era of systemic innovation, where technology is embedded in people and processes, well-planned M&A are recognized as critical to fast-track technology company success and even survival.

The four main reasons for making an acquisition include:

  1. To acquire complementary products, in order to broaden the line

  2. To acquire new markets or distribution channels

  3. To acquire additional mass, and benefit from economies of scale

  4. To acquire technology, to complement or replace the currently used one

Merger synergies are great as they may give companies the needed technology, people, infrastructure, global sales, marketing and distribution opportunities. This is the reason why the majority of technology companies that go public tend to be acquired within two years after the flotation.

M&A strategies to address market challenges include:

  • Rolling up existing suppliers and customers to gain market share

  • Rolling up companies to buy customers and enabling technology

  • Merging forces with competitors to obtain scale

  • Initiating a new business by purchasing one with the necessary content or elements

  • Adding a new vertical category to an existing business

  • Acquiring enabling infrastructure to support marketplaces and the associated supply chain

Getting People Issues Right

Same Reality, Different Perceptions

Mergers and acquisitions, and indeed any form of change that will have a real or perceived impact on the daily work of staff, will realize their full potential only if people issues are dealt with from the start and not left until after the deal has been struck... More

Venture Acquisitions

In today's era driven by systemic innovation, acquiring and integrating capabilities, know-how, and technologies has become an efficient route to growth and a strong alternative to internal research and product development. Acquisition and integration of ventures is an effective method for supplementing a product and business portfolio with the best available technology, as well as enter emerging markets, with speed.

Companies that chose a venture acquisition strategy are challenged to rethink the role of R&D and knowledge management within their corporations, to fit the new offerings with the near-term strategic and operating portfolio, and to prepare a sales, manufacturing, and distribution organization. This challenge requires learning about priorities, markets, technologies, speed of product/service development, integration of achievement-oriented people, and cultural fit. "These challenges are viewed from the perspectives of acquiring management and the about-to-be-acquired entrepreneurial leader and organization. This is an art, not a science, and it is easier to develop as a plan than it is to implement. After all, the human element is a critical component of this process."1 ... More

 

 

SMART Business Architect (Ten3 Mini-course)

 

References:

  1. "Venture Catalyst", Donald L. Laurie

  2. "Mergers and Acquisitions", J.Fred Weston and Samuel C. Weaver

  3. "How Boards Can Say Nay to M&A", Robert Gertner