June 12, 2019
“Doing your pre-merger due diligence is essential, but we have learned, at times the hard way, that this due diligence shouldn’t just be from a financial standpoint. Getting a full understanding of the way the incoming organization functions from a process, policies and a personal, human component (or ‘HR factor,’ as we’ve come to call it), is key. As the company doing the acquisition, you want to take your time in getting to know the organization you’ve acquired and fully understand the way that they were doing things, presumably successfully, before you came into the picture. Remember that if they were profitable before you merge, they should remain profitable afterward, so you do have some time on your side to cement the courtship before bringing things under one roof. You need to take your time with that HR factor in an acquisition, but not from a branding perspective. We once learned in an early acquisition, and learned the hard way, that corporate communication, both internal and external, needs to have a set ‘go-live’ date and plan in place well before the transaction. On that date, you need to have all your ducks in a row so that your two teams coming together as one know exactly what they need to about the company as a whole, its vision, and how the brand is going to go to market in the future. If you let both brands co-exist separately, it will only make ripping the Band-Aid off later more difficult, more time-consuming and more costly as the departing brand becomes more and more embedded.” —Aaron Bradley, VP of marketing, CareWorxShutterstock
Rik Turner, principal analyst at Ovum, said the acquisitions are beneficial in that customers want to buy technology from a smaller number of vendors, and therefore manage fewer relationships.
Ovum’s Rik Turner
“I also fully expect this trend to continue for the foreseeable future, and possibly even accelerate if the stock market weakens and IPOs become a more difficult alternative,” he said. “The cyber industry has long been one in which a few behemoths at the high end of the market sit and watch the startups emerge in new market segments, then eventually acquire when they deem the time is right — a sort of a cyber version of Mao Zedong’s ‘let a thousand flowers bloom.'”
Mike Suby, Stratecast vice president of research at Frost & Sullivan, said there’s growing recognition that there’s “no silver bullet” in cybersecurity, and that it takes an assortment of technologies, depending on the risk, that need to be managed. Therefore, it’s more advantageous for businesses to get more technologies that work well together from fewer vendors, he said.
Cybersecurity M&A will continue through 2019 and into 2020, but there are “too many variables” to forecast whether the frenzied pace will continue, he said.
Scroll through our slideshow above for a look at the deals that have taken place so far this year.
About the Author(s)
You May Also Like