Innovation-driven M&A: Growth through Acquisitions
M&A is a tactic to execute growth strategy. A business needs an inorganic innovation strategy as much as it needs an organic one.
29 August 2014
In my prior blog, we discussed how the technology industry uses M&A to acquire innovation, rather than relying on homegrown research and development. Now we’ll consider the practical application of this strategy for you, in your industry.
In March, PwC published a report: “Acquiring Innovation: Strategic deal-making to create value through M&A.” It combined survey results and themes from a roundtable discussion with tech sector corporate dealmakers, with PwC’s own market observations.
This resulted in a checklist of success determinants, listed below.
The Right People, Prospects, and Plans
It all starts with the deal team. It’s down to who has a seat at the table, and how much that person owns at each stage of the deal process. Accountability for the team members is key. Breadth and depth of function and perspective is critical, so you need a well-rounded group working on strategy.
Sitting alongside the corporate dealmaker, make sure you have the following team members:
- The business line manager whose unit growth strategy is driving the deal
- The ultimate deal approver (and probably check signer)
- The M&A integration team who’ll bring any of the acquisition’s assets into corporate alignment
- The senor technology executives charged with integrating the acquisition onto the acquirer’s technology platform
- And maybe let’s save a chair for an external transaction advisor or two
Before You Seek a M&A Target, Think
Let’s not forget that M&A is a tactic to execute growth strategy. Not the other way around. A company needs an inorganic innovation strategy as much as it needs an organic one. And they should complement one another. Having a well-defined growth strategy, backed up by all the macro- and micro-market analyses, is critical. Building clear roadmaps, product plans, and go-to-market strategies is essential.
Once that is done, then it’s time to look for targets. Stay tuned to my post tomorrow for more tips around targets and strategy.
Allan Cunningham is a senior media executive who has spent the last 15 years of his career working for some of the world’s most respected M&A and Private Equity media companies including Dow Jones’s publications Private Equity Analyst and VentureWire and most recently, The Deal. He has built a number of successful digital and event content businesses, both subscription and sponsor-supported, delivering information and content-marketing services to clients in the M&A and broader deal ecosystem.