Merger (or Acquisition) Recommendations? 63
pauly asks: "We are a small (5 man) specialized software company which is merging with a larger (200+ employee) company. Basically they are buying us to
add a whole new product line and have us be their development skunkworks. What recommendations would Slashdot readers have before, during, or shortly after the acquisition? This post is not a solicitation of legal advice: we have a very nice contract drawn up which is agreeable to both parties and which we will be signing shortly. We are looking for practical precautions or recommendations.
If you have gone through the same type of deal, what would you do the same, or differently?"
This is silly (Score:5, Funny)
Be an anthropologist (Score:4, Insightful)
Do they really want a skunk works? Will they still want it during the next revenue crunch? If they're actually believers, why didn't they have one already?
Make sure the salespeople know what they need to about your product line.
If you've already negotiated the contract it's too late to talk about precautions.
Scarcely Credible Operation, Software Career Over, Sold Crap Only. Sued Competitors Often, Strangely Claiming Ownership.
Re:Be an anthropologist (Score:5, Informative)
Don't just study them. Join them. Make a point of meeting people in the company, learning about the other products, customers, etc. Be friendly with everyone--the first person you get to know may turn out to be a great ally or they may turn out to be the universally lothed office jerk--so don't "choose sides" until you've been there a while. In short, act like a new hire rather than a member of an organ transplant just waiting for the T-cells to show up.
-- MarkusQ
Well... (Score:4, Insightful)
Re:Well... (Score:1)
nsebban is right, plus it never hurts to have your ducks in a row. Also Mensababe should be noted as also being right, get a contract lawyer to go over the contract.
As for those who complain about italics for emphisis well her usage is spot on, and I despise MENSA so I have nothing to gain by pointing our she is right.
Re:News for nerds stuff that matters. (Score:2)
"Oh, yeah. Right..."
Here is what you have to do. (Score:5, Informative)
Re:Here is what you have to do. (Score:5, Insightful)
The only thing I would do differently is not believe the "nice and agreeable" contract. There will be a loophole your, or their lawyers missed, it will cause problems and bitterness. Accept it will happen and plan accordingly.
Generally speaking I wouldn't recommend mergers, if you have a good product sell it to the company on an exclusive for x years contract. Don't sell the talent, it rarely works out smoothly or for the best.
The second time the company I worked for was sold, I learnt some crucial advice for the CEO. Don't say you're going to be there and support the team you built from scratch throughout the whole transition period, and then 4 days later quit, take the massive cash offer and disappear to a golf course for the rest of your life.
The people you leave behind tend to get paranoid and start looking for new jobs before you hire your first caddy...
Re:Here is what you have to do. (Score:1, Troll)
Re:My suggestion (Score:1)
Sunday July 13, @09:43AM [ Add Friend | 5 Comments | #39217 ]
I have some very bad news. I might not be able to post on Slashdot for some time. I am terribly sorry, but I am afraid it is inevitable. Unfortunately I cannot tell you any more details right now. I am sorry.
One would think someone from mensa would know better than to open their mouths about something like that and renege barely 1 hour [slashdot.org] later.
But, worse than that, normally one qualifies a statement that goes against all known scienc
Re:You are truly amazing. (Score:1)
Re:Here is what you have to do. (Score:1)
I mean how does someone with supposedly "superiour" intellect make a spelling error in their own sig?
prepare (Score:5, Insightful)
if you're willing to sell your loyalty to someone with the money, make sure you get to keep your job afterwards. that's my advice.
Re:prepare (Score:3, Insightful)
Re:prepare (Score:2)
Re:prepare (Score:2)
Re:prepare (Score:1)
Why be aquired? (Score:5, Insightful)
Hear me out. Why do you want to be aquired? Here's what I see: You've developed a small and successful software company, and a larger company wants controlling interest in your company to improve its profits. You can give them that interest without sacrificing your independence, or your profit.
If you're aquired, you become employees of the larger company and will not share in the financial gain the larger company will aquire. Obviously, they see a potential for profit which outweighs cost of aquiring your company and yourselves. Most likely, by aquiring you they'll get something you would NOT give them if you gave them interest in the company and a royalty contract. Exclusive rights to your software and related expertise, most likely.
You can give them stock in your company without giving them your whole company. You can give them voting or non-voting stock, if you want. You can grant exclusive licenses to projects. So, my question is, why do you want to be aquired? Do you want a check with lots of zeros up front? Would you rather administration be handled by division manager instead of someone you have to hire and pay a salary? What are you gaining by merging? You really have to know what you want to gain to know how you should prepare.
My recommendation is to consult (read: pay) a corporate lawyer and corporate accountant (or two) over dinner. If it's administration and book keeping you're after, you can hire administration staff: as stockholders, you're in charge, they do the paperwork, give advice, and ask for direction. If it's a merger you're after, paid counsel is usually the best advice you can get, and they'll teach you how to maximize your returns and maintain control.
Re:Why be aquired? (Score:2, Informative)
Additional background from the submitter (Score:3, Informative)
Re:Additional background from the submitter (Score:3, Interesting)
we (the quints) do receive a cut of the revenue we bring in from new installations of our software
Don't count on this unless there are specified minimums. I've seen a case that sounds exactly like what you are describing, where after a week or so of happy-happy, the new hires started getting assigned to help another team that was developing a replacement product, were told to add a data export feature to their product, etc. They wound up doing 90% of the work to migrate their old customers to the new o
Re:Why be aquired? (Score:2)
This is going off an an angle from the poster's question, but I think it's interesting.
They could act under the umbrella of a well known company without losing their company, also. It's a product (plus development) the prospective parent wants, it seems. The product doesn't have to mean the entire company. (On the other hand, with OSS development quickly becoming the only way to develop large/com
Sorry (Score:5, Funny)
Then I'm sorry but we at Slashdot, being all professional lawyers, are therefore unable to help you. As we pride ourselves on our ability to carefully consider and dispense legal advice, surely you can see that by straying outside our field of expertise we would be doing you a disservice.
If you were asking for legal advice, then I'm sure you would have received 100 replies to your story by now.
Might I direct you to other places worthy or your questions, like kuro5hin [kuro5hin.org]?
Terms of the deal (Score:1)
Only one in 5 work out (Score:3, Interesting)
I think that was the number we were given when our smallish (1200 people) company was bought out by a big (~7000 people) company. They said they were commitied to making it work, and for the first year it looked that way. Then things went downhill. Slowly management got worse as people left or got transfered. Eventially good talent was brought in, but by then it was too late, the new CEO 6 years latter didn't care about us, and 7 years latter only about 10 people have a job from the old company (some hired after the marger)
To be fair, the new CEO made the right decision, the merger failed, and could not be rescued. The problem was the salespeople had no interest in selling our products, so we had plenty of great products that nobody was buying. The merger failed because one of the benifits (the big company's salespeople had better contacts in industry, and there were mote of them) didn't work out.
In other words, even if everything seems brought now, keep yoru resume up to date, the things that make a merger fail are the same as any engeriing product: management or sales. I've seen many cases of a baddly engineered product doing well, while the compitition that is better built fails in the market.
Working for a Big Company is different. (Score:2, Interesting)
Before the buy-out, I worked, not in an office, because there was no door, but it was in a dead-end, quite cul-de-sac of a quirky office suite.
Post-IBM, we got moved to a building roughly approximating an airplane hangar, scores of people in cubes, no privacy, no way to concentrate.
Everytime a salesman made a particular type of sale (I guess it was a high-end sale) they would ding a bell over a loudspeaker, and everyone would pop up like prarie gophers, tryi
parachute (Score:1)
But, if it doesn't make sure you have a big, fat golden parachute waiting to make the landing softer.
Watch their every move (Score:2, Insightful)
When the (under 10 employees) company I was working for was acquired, the owner's response was a succinct "These guys are idiots. If I could raise that kind of money I'd start my own company." He realized he was being offered a good deal and took the money and ran. The rest of us didn't make out quite so well! He was right: they had no knowledge of the business, ignored th
Steal (Score:2, Funny)
desktop KVMs
4 and 8 port switches
your 'company purchased' cable modem
the portable CDRW drive
etc.
Line your pockets, let the Man buy stuff once you've been acquired!
Re:Why Ask? (Score:2)
The deed is done. They want advice on how to integrate themselves into the new company with as little pain as possible.
Stop using us for advice, Blogger! (Score:1)
It sound like Pyra Labs/Blogger people have got to Google and are now getting bullied in the corridors! Do not ask us for advice, wimps!
sucks (Score:1, Interesting)
Shortly after, we had an HR department run by Nazis. Managers were hired that fit more into the "corporate" world. The fun plug was pulled on just about ever
Practical Recommendations... (Score:1)
Spirits were high, so were expectations for the future. We hired an expensive CEO. We hired an expensive marketing guy. We hired an expensive sales weasel.
Then the infighting started. Initially between the Swiss and Australian office. Then between the founders and the CEO. Then pretty much between the entire board of directors, founders, CEO and all
Re:Practical Recommendations... (Score:2)
Practical reccomdendations?
The first six months will be spent teaching your technology to 'new hires' ostensibly there to 'learn how to integrate your stuff with their stuff' or 'allow for bigger scope.'
Then, anybody from the smaller company with anything approaching 'authority' or 'ownership' will 'coincidentally' leave the company 'to persue new options.'
Then, you'll be shuffled to either a) tech support, b) a new product line, or c) ousted completely.
Accept Change and Have the Right Attitude (Score:1)
Be prepared to accept changes in how you work, what you work on, and that you won't be an independent group any more. Some of these changes will be positive, others will be decidedly less so. Only fight the changes that really matter since fighting them all will be futile and frustrating. And, keep in mind that one of the changes may be that you are out on your own again (voluntarily or otherwise).
But, in any case, having the ri
Skunkworks? (Score:2, Insightful)
Been there - It can work (Score:1)
They will say . . . (Score:1)
That, plus $2 will get you a nice cup of coffee.
Don't get me wrong, they are truly sincere, just sincerely lying.
On the practical side, don't piss off anyone until you figure out who controls your future in the new business model.
I've been on both sides of this equation, and I can tell you that the other side is a lot more fun. If you play nicely, howeve
Had to be said... (Score:2, Funny)
Resistance is futile.
You will be assimilated.
Not big enough to worry about (Score:1)
Many things... (Score:1)
2) You retain hire/fire power to grow YOUR team.
3) Get a budget that you control.
4) Start looking for another job anyway, because you blew it...
--ee
Beeing Acquired... (Score:1)
My advice is that once you are acquired, become a part of that new company. It will make your lives much easier. No one wants to hear "well, when we were so-and-so, we did it this way" over and over again. They may be interested in that if you have something really a
Protect yourself and enjoy the ride (Score:2)
All the advice I can offer is to spend some time studying the "culture" of your new company & try to fit yourself into it (or create a niche for your style). If that means things as trivial as dress standards & water cooler slang, do it.
Of course, if conforming means outright prostitution of your principles, I'd say "freshen up the resumé." Either way, make sure you are adequately protected by your contract.
It doesn't sound li
Have faith in what got you to this point (Score:1)
In my case, the purchasing company was bigger and (seemingly) more advanced than we were, and accordingly my initial approach was to bend over backwards to accomodate their requests, integrate with their technology, stay humble, allow that other folks may have solved the usual problems differently/better, give the benefit of the doubt, etc.
What I didn't ap
Merger (Score:2)
first things first.... (Score:1)