Creating Collaborative Business Outcomes: Why Tech and Finance Leaders Should Unite During the M&A Process Paul Pester his job and added more than £176 million in costs to the acquisition deal in compensation, lost income and additional resources (Raconteur). Sprint hoped their $35 billion majority stake acquisition of Nextel Communications would help them become the third largest telecommunications provider in the US at the time. The upside was clear – gaining access to each other’s customer bases would see both companies grow exponentially. However, the two companies had no overlaps in terms of the technology – their networks were fundamentally incompatible, making it incredibly difficult to merge operations and resulting in a huge market share loss (M&A Science). But it’s not always like that. One example where technology teams had been consulted early in the process was the proposed acquisition of the Williams & Glyn bank branch network by Santander. The technology teams found that ‘unpicking the existing technology’ was simply too complex, and the whole deal was halted (Raconteur). Whilst it was no doubt a blow to those who’d spent time and money on investigating the feasibility of the deal, it would ultimately have much more costly had they not stopped the process at that point and proceeded without realising the tech issues they were facing. This is a rare case of technical and operational experts being given the time, understanding and priority to make an honest assessment – this assessment revealed the problems involved which put a stop to a potentially disastrous deal. How to avoid the pitfalls While the process may not be simple, the concept of mitigating risks surrounding merging technologies is straightforward enough. But to mitigate or accept a risk, you have to know it exists and then understand it: this is what due diligence is for. We’re more than comfortable performing financial due diligence, so adding technical due diligence shouldn’t be an alien concept. Technical leaders need to be given time and resources to identify risks and consolidation opportunities and, once you have the results of their investigations coming back, they need to be taken seriously. History has shown us time after time, once the deal has been signed and the process of merging the two companies, or assimilating one company into the other, has begun, it’s too late to highlight any red flags which may have stopped the M&A process had they been discovered before the ink on the contract dried. David Tyler
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