March 16, 2015

For M&A, waiting is the hardest part

In the tech sphere, mergers and acquisitions can be a serious waiting game. From waiting for a company to demonstrate interest in purchasing your firm to waiting for legal, strategic and executive players to confirm the final details of a merger, the process of sealing the deal can be sluggish. 

However, it's important for tech entrepreneurs to make the most of their downtime. From cleaning up inefficiency around operations to making strong contacts within the field, there are many ways to bide one's time during a merger or acquisition without losing focus on the primary goal at hand. In CIO Magazine, Rich Casselberry says that waiting can provide opportunities for success as well as missteps for executives in temporary limbo. 

"Try to avoid gossiping and speculation," he cautions. "Focus on the work at hand. Of course, it doesn't hurt to do some networking while you are waiting for the outcome of the merger or acquisition, but avoid jumping at the first job that comes your way. Many times people get promoted during acquisitions and some get retention bonuses for taking on the risk of staying with the company."

Advancing plans that work contrary to the goals of a merger, like up-selling a competitor to your prospective parent company on a business arrangement, can be a bad idea. And as Casselberry says, keeping a lid on the details of a deal until it's finalized can prevent embarrassing disappointments if something falls through. Your partner in a deal probably values the trust and confidence it has placed in your firm, so breaking that social contract is dangerous. 

With the help of an M&A advisor, companies can implement an effective acquisition strategy and make the best use of waiting periods.