Growth through acquisition is promising but is not without its pitfalls. There are several common, avoidable reasons acquisitions fail and learning from these mistakes and oversights can set your company up for successful future acquisitions.
Leadership: Acquisitions fail when leadership is not proactive or sufficiently involved in the acquisition process.
Due diligence: Acquisitions fail when companies do not act on due-diligence discoveries.
Technology: Acquisitions fail when buyers have unrealistic expectations of system integration.
Strategy: Acquisitions fail when a clear strategy isn’t used to determine integration goals.
Talent: Acquisitions fail when buyers lose key talent during the process.
Financial overextension: Acquisitions fail when negotiations get dragged out and deplete financial resources.
Culture: Acquisitions fail when buyers trample the culture of the company being acquired.
Synergy: Acquisitions fail when buyers come in with too high of expectations of merger synergies.
Communication: Acquisitions fail when communication breaks down and causes a chain reaction of disconnect and disappointment.
A few tips to Succeed
- Be thorough. Leave no stone unturned throughout the acquisition process.
- Pay attention to mergers and acquisitions in the news. Learn from other buyers!
- Acquisitions take time and cost money – be patient and methodical.
Your diligence will pay off and your company will grow! Considering business acquisition? Reach us anytime at 612.331.8392 or by email at info@oibmn.com.