https://berkonomics.com/?p=2801&utm_source=rss&utm_medium=rss&utm_campaign=how-to-plan-to-make-a-successful-acquisition Dave Berkus' business insights Tue, 27 Dec 2016 19:57:36 +0000 hourly 1 https://wordpress.org/?v=6.9.4 https://berkonomics.com/?p=2801&cpage=1#comment-93806 Tue, 27 Dec 2016 19:57:36 +0000 https://berkonomics.com/?p=2801#comment-93806 Dave, I would add that this approach works best when 1) the buyer has expertise in the acquisition’s market and technology, 2) companies share similar cultures, 3) integration is a top level activity at buyer, and 4) acquisition half the size of buyer. Historically better than 70% of acquisitions fail to achieve an increase in valuation of the combined businesses. Those companies that regularly make acquisitions of smaller companies with similar cultures tend to get the most out of integration savings. The reason for making the acquisition is also a big factor. Buying complimentary technology (e.g. Google purchase of YouTube) is a better strategy than buying up market share (HP purchase of Compaq). While cost savings synergies can enhance an acquisition, the way they are implemented is critical. Forcing synergies between sister companies is usually a disaster. Even small changes can alienate management and erode value if acquired management feels they no longer are in control of their operations.

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