How to Optimize Your Acquisition Strategy

Ryan McGrath
May 17, 2022
min read
How to Optimize Your Acquisition Strategy

Acquisitions can be one of the fastest and most effective ways for a company to expand its reach, attract new business, and ultimately spur success. While organic growth is important, it’s not the only way to scale a business. A majority of the large, successful companies we see today have been built on at least one, if not more, mergers or acquisitions.

That being said, mergers and acquisitions come with their own set of unique challenges. For a deal to bring enduring synergy, both companies (but particularly the acquirer) need to stay the course. Here are four critical aspects leaders should keep top of mind when navigating a deal.

Business Synergy

It goes without saying that the potential acquisition has to add something worthwhile to be considered truly valuable, whether it be a new location, business service, or technology. Not only does this value need to exist, but the acquirer needs to be able to use it strategically.

So, ask yourself, does the new location, business service, or technology align with your company's strategic goals? The answer should be a resounding yes—maybe not just for this year, but for years to come, as well.

Company Culture

Do the inherent values of both organizations match up? This is something I ask myself any time we are considering a potential acquisition. A large part of my role as a CEO is spent building and sustaining company culture. Businesses, regardless of their industry, are driven by people and the inherent traits they regularly uphold.

Therefore, it’s critical that the individuals set to come together as a result of the business deal share congruent core values. Looking beyond business synergy and specifically at company culture will ultimately aid in the integration process, which can become arduous if you downplay the importance of cultural fit.

Mutual Respect

When an acquisition is underway, it is common for respective leaders from both organizations to meet regularly prior to the deal’s closing. Use this time wisely. Try to determine if there’s inherent harmony between both parties; a mutual understanding and a collective push for shared success are optimal. How senior leadership gets along serves as a primary indicator of how the teams below them will work together down the line.

Change and Humility

Both organizations should not only accept change but embrace it. Mergers and acquisitions don’t bode well for the rigid. In other words, growth at scale goes hand-in-hand with change and the

inherent uncertainty that follows. Certainly, perform your due diligence but as a leader—and ultimately a decision-maker—you’ll never have all the information you feel you need.

Candidly, I have found that a healthy dose of humility is also required, particularly on behalf of the acquirer, for a deal to reach its true potential. As a leader, if you walk into the acquisition process believing you have all of the answers, chances are the deal won’t go as planned. Listening oftentimes is the first step to progress, especially in the board room.

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