There are many different reasons why companies buy other entities. Traditionally, acquirers have focused more on the financial aspect of the target company. However, experience has shown that not all acquisitions are the same, and must be executed properly against their strategy. In this article, we discuss how to execute product-based acquisitions featuring Andrew Morbitzer, VP/Head of Corporate Development at Typeform.
“When executing a product-based acquisition, it should be the same people going all the way through the formal diligence over into integration planning and integration execution.” - Andrew Morbitzer
When it comes to product-based acquisitions, product fit must be the priority. Before a target company can even be considered, its product should have the ability to accelerate the company’s strategy. This includes the engineers that developed the product. It’s crucial to have the same people on diligence doing the integration to ensure everything revolves around the product.
According to Andrew, when it comes to product-based acquisitions, it has to be 100% proactive. The acquiring entity must be the one initiating the transaction in order for it to be successful. A proactive approach aligns the company strategy, product strategy, and M&A strategy, setting up the entire deal for success.
A product-based acquisition strategy that relies on a reactive approach or one that bends strategy based on opportunities that emerge over time is less likely to yield fruitful results.