Priorities and Considerations When Planning an Acquisition

An acquisition is a big exciting step in a company’s growth and we just completed our first, of longtime valued partner SIGMA Threat Management Associates. The deliberate process my team undertook to review our priorities and strategic considerations before making such an important decision was significant –– one that every leader should take into account when endeavoring to achieve this major company milestone. 

Integrating the culture of another business into yours, expanding and in some cases offering brand new products and services to customers, refreshing messaging, branding, and so on, are important measures that impact both companies. And if you are fortunate enough to combine with the right business, it will be for the better. Finding the right company to acquire that will enhance your company’s purpose, share its vision, strengthen its brand, expertise and bottom line can make all the difference for long-term success. 

Understand your rationale – why are you acquiring in the first place?

Is it to offer a new product or service clients need? Expand current offerings? Secure a valuable book of business much more challenging to do on your own? Expand your footprint nationally or globally? Whatever the reasons, having a solid business case to back up your motivation to acquire is necessary. The business you’re after will want to know what you find so appealing about them. At the same time, you’ll also need to present your rationale to investors, your board and other leaders in your company, and convince them that this new integrated entity will be beneficial for both parties and make everyone involved better.

Evaluate company cultures – is it a good fit? 

It may be cliche, but it is true -- acquiring a company is similar to marriage. When two people choose to blend their lives, though compromises are made, a key to successful marriages are common goals and shared values. As two companies work towards becoming one, it is crucial to ensure strategic visions, goals, as well as the way they conduct business on a day-to-day basis are aligned. How they view and treat their employees, recruit new candidates, handle crises, and their industry reputation all contribute to the type of culture they will bring into your company. Suffice to say, it’s good to get along with the people you see and work with every single day. 

How will the acquisition impact company structure and growth? 

All companies have aspirations to grow. But what constitutes growth and the pace at which organizations want to expand, of course, can differ. Whether strategic priorities are to own industry sectors, secure specific clients, strengthen brand recognition or drive revenue growth and profitability, it’s important the company you’re pursuing is like-minded. If aligned on how you define growth, assess how the merging of two companies will actually foster that growth. Do they bring something to the table that you are currently unable to offer due to lack of expertise or bandwidth? Are the products and services offered by both companies complementary to one another? In other words, if you combined these offerings would they appeal to current clients and expand opportunities with prospects? From an employee perspective, it’s necessary to evaluate whether this integration creates or diminishes opportunities for existing and new employees. While it’s important that your company’s portfolio of services and solutions grows with the acquisition, employee prosperity is important to consider as well. 

Make sure the move is financially feasible.

This is probably obvious, but your company needs to be on solid financial ground before taking on another. If you’re uncertain, it might not be the right time to take such a financial leap. Acquisitions are an investment in your company’s future. Just as you had to put forth a substantial amount of money to get your business off the ground, significant monetary investments like this one are needed to build the company up. Deciding on the best timing, and course of action to make a smart financial decision should be at the forefront of the conversation when considering an acquisition.

Ontic’s recent acquisition was a phenomenal learning experience for everyone involved, requiring both our company and SIGMA to reflect on a myriad of priorities and considerations. As we take the next step in our journey together, we are collectively looking forward to seeing our shared vision and mission of helping security professionals keep their organizations safe come to fruition. Dr. Randazzo and her team will bring a new level of expertise to Ontic, and we will undoubtedly accomplish great things together in the near future.  

For those of you who have gone through this process, what recommendations would you make to companies who are considering pursuing an acquisition?