January 21, 2014

Former Yahoo finance VP gives advice on business acquisitions

Previously on this blog, we wrote about some of the recent business acquisitions that have taken place at Yahoo since Marissa Mayer stepped into the role of CEO. However, the fact is that these kinds of transactions occurred at Yahoo long before Mayer took over in July 2012, and have been integral to shaping the brand's spot in the internet space.

With this in mind, Inc.com sat down with Yahoo's former vice president of corporate finance, Dennis Morgan, to discuss the $5 billion worth of business acquisitions he was part of during his tenure with the company. Morgan offered his advice to companies going through similar processes.

In one of the most telling parts of the interview, Morgan explained to the news outlet that when acquisitions fail, it's usually because there is a disconnect between expectations and reality, and that in most cases, this is a result of poor planning. Fortunately, there are ways to prevent this from happening. 

"You have to put an operating plan (OP) in place as early as possible," Morgan told the source. "In the pre-acquisition phase, companies spend so much time on due diligence that they neglect putting an operating plan in place. You should have the OP done before the due diligence, so that during due diligence you're looking for the things that will prevent you from executing your OP."

Companies that are in the process of acquiring other businesses will benefit from following Morgan's advice and by working with a mergers and acquisitions firm to ensure a smooth transition.