M&A Deal Sourcing in the Tech Space

The technology industry is currently experiencing significant growth, particularly with the emergence of artificial intelligence. This trend has not only attracted significant investments but has also intensified the competition among tech companies striving to lead the market. This has made the tech space a prime area for M&A. Boomi is one of those companies who have recently made a significant move via acquisitions. In this article, we will discuss how to source deals in the tech space with Steve Lucas, CEO of Boomi.  

“You can only move as quickly in M&A as your ability to integrate and metabolize companies, not how quickly you can sign agreements and buy them.” - Steve Lucas

Boomi’s approach on strategy

According to Steve, always approach strategy from a position of strength. First, focus on what the company is good at, and then explore other opportunities to solve existing customer problems. Finding those problems and solving them well generally leads to economic rewards. Also, dream big and know your long term goals. Grab opportunities when you see one, and move quickly. 

Deal sourcing

When it comes to deal sourcing, CEOs must be heavily involved, especially building relationships with other CEOS, as they are usually the first touch point in these conversations. Steve has a very direct approach, and he is looking for smart and confident people who can challenge him. Chances are, these are the people that will be working for his company post-close. 

Convincing people to sell their business is a bit tougher. It’s all about knowing your strength, and bringing the combined vision to the entrepreneur, with the promise of speed and certainty.

Negotiations

Negotiations have been tough in the technology space, as there are still founders who are hungover from the 2021 valuations. However, that is no longer the case as the environment has now normalized. 

When dealing with these types of sellers, leverage the network you can help them build. They might not get the price they want, but there will be an existing partnership where you could help them in their future endeavors. 

Integration 

In the technology space, data is crucial, and there is an abundance of it in the market. To increase your chances of success during integration, follow these three tips:

1. Know what information you really need 
2. Understand how, when, and where you move information between different systems create outcomes
3. Know how you will consolidate data over time