What Makes an Acquisition Successful?

by Viper Equity Partners | Sep 20, 2022 | Business, Investment Banking Facilitation, Viper Equity Partners

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Why do some companies acquire and then fail so many times? The answer is a crucial question in the current M&A climate. Since 2000, over 790,000 mergers and acquisitions worldwide have a combined value of over $55 trillion. In 2018, there were over 52,000 acquisitions that were worth over $4 trillion.

Although there is no single magic formula for success, four key factors can be considered when making an acquisition successful. These include the right combination of people and resources, the right growth strategy, and competitive dierentiation.

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Before you start the acquisition process, ensure that the vision the two companies came up with during their initial discussions is still the guiding principle. This will allow you to make informed decisions and implement the necessary strategies. The true north of the acquisition process is accelerating the two organizations’ vision as a combined company. This will allow you to make informed decisions and implement the necessary strategies.

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Focus on Meeting Customer Needs

Unfortunately, many companies get carried away by the generic best practices and o-the-shelf plans usually used during acquisition. This often leads to them ignoring the unique aspects of the deal. Getting carried away by the endless rules and procedures usually imposed on the newly acquired company can lead to many problems. In addition, failing to communicate eectively with the acquired team can lead to a failure to close the deal.

The last step in the acquisition process is usually the integration of the two companies operations. Unfortunately, this often doesn’t go far enough and can obscure the reasons why the two organizations decided to join together in the rst place. The integration should be tailored to support the goals and sources of value identied in the deal.

Focus on Shared Vision

One of the most critical steps a company should take after completing an acquisition is to establish a set of metrics that will allow it to measure the success of the purchase. These include the number of people aware of the company’s marketing eorts and customers experiencing the new organization’s sales eectiveness.

It’s easy to lose key employees after an acquisition in specic industries due to the lack of skills and the culture they’re not happy with. Companies must nd a good t for their strategic and cultural goals. One of the most important factors

Getting the new organization to operate smoothly is not an easy task. The acquired, and the latest company must ensure that they’re working together seamlessly to make their customers feel valued and satised.

Focus on Key Metrics

Following an acquisition, many companies feel that they’re experiencing a great deal of euphoria. However, this can be short-lived if they don’t take the necessary steps to ensure that the acquisition is successful.

Focus on Culture

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After completing an acquisition, the newly acquired company’s customers must be aware of the changes that are happening in the organization. These changes can make them feel like they’re being ignored and that they’re not being taken seriously. It’s also crucial that the newly acquired company maintains its identity as a smaller, independent organization. This will allow it to continue providing its customers with the same service and products they’re used to.