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What Can Be Learned From Failed Attempts At Merging & Acquiring Technology Companies

Ed Gehres

February 16, 2024

What Can Be Learned From Failed Attempts At Merging & Acquiring Technology Companies

Mergers and acquisitions in the tech industry are common. While many combinations are successful, they do sometimes fail. In this blog post, we'll look at what can be learned from failed attempts at merging and acquiring technology companies.

Due Diligence is Critical

It's important to understand the company you want to merge or acquire and ensure it fits into your existing business structure. Begin by investigating the target company’s:

  • Financials
  • Products and services
  • Billing methods
  • Competitors and partners
  • Management team
  • Any potential legal issues that could arise from the acquisition or merger

Communication is Essential

Another lesson to be learned is that communication is essential. All stakeholders need to be kept up-to-date on the progress of the process and any challenges encountered along the way. This transparency helps build trust between all parties involved and ensures a smoother transition if/when the deal goes through.

Set Proper Expectations and Be Flexible

It's also crucial to ensure that expectations are met on both sides of a merger or acquisition—especially concerning strategy, finances, culture, and operations.

The best way to do this is by thoroughly planning each step of the process and having clear objectives for everyone involved.

We also suggest investing in an advisor who can help you strategize and plan. They will have the playbooks and checklists and thoroughly understand the process and timeline.

Don't Ignore Culture

Finally, it's important to pay close attention to cultural differences between organizations when considering mergers or acquisitions—even within industries like technology, where cultures can differ greatly. If there is a big gap between how companies operate, then it might not be possible for them to successfully combine their processes without major difficulties occurring along the way.

We’ve seen high-stakes acquisitions end in culture clashes, causing an exodus of talent that eventually led to the failure and divestiture of the acquired company—a horrible result for the simple crime of ignoring culture.

Remain Open to Learning

Despite failed attempts at merging with and acquiring technology companies, there are still more lessons to be gleaned from them that can help us better prepare for future deals.

M&A can be exciting and rewarding, but it's important to remember that each deal is unique and offers its own set of learning opportunities. Continuous improvement is possible if an active commitment to recognizing and implementing those improvements exists.

To increase the likelihood of success in your merger or acquisition attempts, ensure thorough due diligence, refine your communication strategies, and be mindful of cultural differences.

Let True North Navigate You Through the M&A Process With Confidence

True North Mergers & Acquisitions is committed to guiding you through a seamless M&A process tailored to your business needs and personal goals. If you're gearing up for the future and need strategic insights to help you navigate, contact us now. Your first step toward a successful merger or acquisition starts here.

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