March 3, 2022
“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
We’re witnessing a record volume of tech M&A activity throughout the world, but particularly in EMEA. Fuelled by a tidal wave of private equity (PE) money, it’s a trend likely to continue.
In 2021, more than a third of all technology exits in Europe were private equity-funded investors rather than corporate acquirers. According to tech-focused investment bank ICON Corporate Finance, that’s an increase of 38% on 2020, and almost three times as much as in 2015.
Recent examples in Europe include TA Associates’ $2 billion-plus acquisition of the Dutch enterprise software firm Unit4 NV, as well as the majority buy-out of Irish Fintech unicorn Fenergo by PE funds Bridgepoint and Astorg.
Growth capital and buy-out firms have never faced more competition as significant numbers of funds actively seek tech opportunities in Europe, creating a sellers’ market for high-quality businesses. Indeed, two-thirds of UK CEOs plan to accelerate M&A in 2022.
In the slideshow above, tech leaders share their thoughts on what’s behind the M&A activity, and how partners can capitalize on the trend.
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