Post Acquisition – It’s Business as Usual Except Better

Recently I wrote about how I think about private company acquisition strategies using FullContact as the example of one where it is working well.

Last week I was at a board meeting for a different company which did an acquisition a month ago. I heard a fantastic line from the founder of the company that had been acquired.

It’s business as usual except better.

Now, it’s only a month in. But this is what an investor loves to hear after a month.

Usually, the first three months post acquisition are up and down. The acquirer and the acquiree are trying to figure out how to interact. The founders of the acquiree are usually tired from the deal process and adjusting to their new reality. The acquirer is trying to be helpful, which is often precisely not helpful, especially as the acquirer integrates the acquiree’s people into its structure and processes.

I know a lot of companies that have a very well defined post-acquisition process. However, many of them don’t take into consideration the dynamics and personalities of the acquiree. Instead, they assume that everyone will happily be assimilated.

Other companies have a very hands off approach for a period of time, sometimes up to a year. But, after that period of time, the mechanical integration often begins. In situations where there has been little to no interaction, followed by too much interaction, pain often follows.

There’s something in between. This is especially important when younger private companies (50 to 500 employees) acquire another smaller (1 – 25 employees) private company. There is no one way. But your goal should be simple: “It’s business as usual except better.”

Also published on Medium.

  • Sam

    That’s a fantastic spot to be one month into the integration. Curious if you got any sense for what’s behind the “except better” comment. Where’s the better coming from?

  • Russell

    Brad. Great post and mergers have definitely been top of mind lately – with notable examples going through or going badly.

    In your earlier post you mentioned you have spent a lot of time “reflecting on which particular acquisitions worked, why they worked, and when they worked, along with understanding the opposite (what failed, why, and when they failed) I started to develop a clear view around a targeted acquisition strategy.”

    I was wondering if you could share some of the other stories of things that worked and didn’t?

  • ptenereillo

    Amen. I’ve been through this 3 times. One was business as usual but better, acquirer added funds for tech resources as requested (but didn’t force us to add headcount), and direct access to the sales force, resulting in several billion revenue from a ~20MM acquisition, One tried “business as usual”, but never stood a chance (parent company tanked shortly after acquisition). One forced integration of the aquiree with a heavy hand, in engineering, marketing, etc, unrealistic schedules, no one knew who was “really” in charge, personal agendas proliferated. A complete train wreck, near immediate loss of momentum, loss of huge subscriber base, and shut down of what was a blockbuster mobile app. Hoping I can make smarter choices next time.

  • The Cisco way of assimilation, to the acquiree: Thou shalt be accretive to the bottom line in 6 months or thou shalt be terminated 😉

  • cavepainting

    Hi Brad, Great post. One of the less discussed things is the question of how to create the right set of incentives and circumstances that allow the founders and employees of the acquired company to continue to build the business with the same passion and commitment they had before the acquisition.

    Getting this right makes all the difference in the final outcome. And it needs the acquirer in general and the CEO in particular to be very conscious and cognizant of the motivations in play.

  • Kasia
  • Mary Judah

    Hi Brad – interesting observations. I’ve worked in HR on many acquisitions, some that went well and many that did not. It strikes me that if even a tiny proportion of the time spent on due diligence had been spent looking to see if the cultures of the companies were like-minded, then it would have been time very well spent …

  • Shiva Venkatraman

    Hi Brad, not sure if it is always the case of “business as usual except better”. I feel some acquired companies like to be left alone in my experience and the acquisition process tends to tire them out. I feel the goal itself is good but if the acquired company has negotiated its independence in the larger mother ship, at best it will be “business as usual with some distractions”. Sorry just my experience and point of view and observing a few companies pre and post merger, especially larger ones.

  • David Slagle

    Brad, I confess. I’m thanking you for your thoughts in a 2008 blog (Valuing Competency vs Loyalty) for which comments are closed. I wish I’d read it in 2008.