Three IT Lessons for M&A Leaders

IT plays an important role in every M&A deal, so it's critical to address technology issues as early as possible.
By John Sinkus, Senior Advisor for M&A Partners, an M&A Leadership Council partner organization

According to Mergermarket, in 2017 the technology sector saw its highest deal count since 2001.* Experts predict that this trend toward technology acquisition will continue for 2018. Yet even M&A teams that aren't acquiring tech firms must play close attention to technology used by the target firm, as often the greatest M&A deal value risk involves technology in some form or fashion. These three lessons will help keep your team from making expensive technology-related mistakes during your next deal.

Learn from the Big Five

Known as the Big Five, Alphabet, Amazon, Apple, Facebook and Microsoft are all highly acquisitive organizations. Yet for the most part they have steered away from acquisitions that would complicate their core business models with complex post-merger integrations. Instead the Big Five seem to favor strategic acquisitions of small to mid-sized companies that add to their technological capabilities, positioning them to disrupt companies across industries. Rather than getting wrapped up in whatever is "shiny and new," they maintain a tight focus on acquisitions that complement or enhance their existing capabilities and capacities. in other words, they don't acquire technology for technology's sake. Read more.

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Also, check our program The Art of M&A Business and IT Alignment which is held once a year in Chicago!