Business Acquisition Complexity

The “Failed” Acquisition By Google/Alphabet HubSpot Is Full Of Complexities & Many Don’t Understand The Process

If you read anything on LinkedIn over the next couple of days I bet it will be people having their say on the “failed” or “abandoned” acquisition from Alphabet acquiring HubSpot.

Having been both sides of acquisitions and playing small parts pre-acquisition and large parts post-acquisition, it is complicated, secretive and to many - doesn’t make much sense.

So, if you haven’t ever been part of the process here are a handful of misunderstood elements in the mix of an acquisition:

• What most people don’t understand about potential business acquisitions especially large business acquisitions, it takes a lot of time

• A lot of resources (M&A teams seem lean but they involve numerous other departments, finance, legal, Product, leadership teams) are assigned and then have to work around the clock to make or break the deal

• There are huge amounts of back and forth and then a long bout of silence

• Many employees have to fly from one destination to another, especially internationally, it’s a big investment on both sides

• Most employees won’t get near the deal or ever be involved so often their take will be what they’ve heard and most definitely won’t be able to share their intel

• It can take one exec or one legal rep to kill a deal and often it in over-negotiating

• It can take months to years to acquire another company 

• Even when the fee is agreed and almost all of the legal are agreed, the sale can be stopped by external regulators (Figma deal with Adobe is a prime example)

• There can be months of negotiation over the price of the company and often over the new structure

• Often in acquisitions, you have a long time working through where your Products align or should connect, if your Product will standalone or integrate and it can often be the sticky point, especially if you have a large influential Product team

• If the acquisition is killed the once-acquirer tends to do ok, the stock on the potential acquisition often drops and impacts the company’s ability for a prolonged period of time.

Whatever you read about it wasn’t smart or didn’t make sense etc, just remember how much time, effort, resource and travel is involved and the impact of the deal being stopped have on the companies.