You’ve taken a bold step to acquire a tech company and accelerate growth. But while you may know your own industry inside and out, this is a different kind of deal, and the way you’ve handled previous acquisitions and integrations probably doesn’t apply.
Determining a tech target’s value, combining organizations and retaining the people who make the company attractive mean doing things differently than in a typical acquisition. And it’s even more critical as the COVID-19 pandemic has sped up digital transformation at a wide range of businesses. For your non-tech company to capture value in a tech acquisition, consider these actions at each stage of the deal process.
Buyers and sellers often have different views on what a business is worth, and that gap can be exacerbated when non-tech acquires tech. Given that, it’s better to agree on a price sooner rather than later. Key considerations include:
This is where non-tech buyers can stumble. Compared with traditional acquisitions, it’s more vital to retain as much of a tech company’s culture and identity as possible so it continues to excel in the nimble, innovative manner that attracted your attention. Here’s how:
Retaining talent is at the core of any tech acquisition, but keeping employees during integration has become increasingly difficult. In our 2020 M&A Integration Survey, only 10% of executives reported significant success in retaining employees — way down from 45% in the 2017 survey and 56% a decade ago. Success today can depend greatly on how you identify and engage key employees during the transaction. What you should consider: