What Really Happens When a Company is Acquired

keenancummings:

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Since February, I’ve been trying to articulate just what happened through the course of our acquisition process. It turns out that the process is still ongoing. 

So what happens in an acquisition?

First off, why do acquisitions happen? This type of smaller acquisition that I’m talking about is becoming more and more common. It’s not an indicator of an economic bubble. It’s not about a tech talent arms race. Buying a company for the expertise or processes embodied in a great team has become a reliable channel for sourcing ‘talent’. It all looks sensational from the outside, but the reality is that the math just adds up: finding the right people is costly; not finding the right people is a huge risk as large incumbents are under constant pressure to keep a step ahead of the small and fast innovators at the bottom of the market. Acquiring teams is becoming standard procedure(1) for big companies that want to maintain relevance by moving at least as fast as these ever-emerging competitive threats. In a market where driven individuals gravitate toward assembling a small scrappy team and taking a shot at something big, there is an ample supply of preassembled teams ready to be integrated into a bigger company and get to work.

So in this kind of environment, most companies — at some point in their lifecycle — end up entertaining the option of an acquisition.

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