What frequent acquirers expect from software vendors
1. What frequent acquirers expect from software vendors
http://www.mergerduediligence.com
Dr. Karl Popp
2. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
AGENDA
What we want
Goals of acquirers
Get clean and compliant
Survive due diligence
Summary
Get visible and relevant
Get to know the acquisition process
3. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
GOALS: WHY DO SOFTWARE COMPANIES ACQUIRE?
To grow
To innovate
Speed up time to market
Marketshare in new markets
To consolidate markets
Buy innovation
Portfolios
4. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
GETTING VISIBLE AND RELEVANT
Get visible
Gain trust
Get help from a sales side consultant
Joint customer success
Become a successful player in partner ecosystem of
acquirer
Get relevant
By analyst coverage
In customers, ecosystems
5. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
DOING SPRING CLEANING IN YOUR COMPANY
What should be
cleaned
Favorite topics: Intellectual property, Intellectual property, Intellectual property
Third party software LICENSES
Patents and litigations
And yes, export law compliance
Customer and employee CONTRACTS
Open source software LICENSES
6. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
MANAGING INTELLECTUAL PROPERTY
Get ownership of
intellectual property by
contracts
Get and comply with
usage rights for intellectual
property
7. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
EXAMPLE: BEST PRACTICE IN MANAGING OPEN SOURCE
Manage
Open source
software
Comply with open source
licenses
Manage and continuously
update OS components
8. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
KNOWING THE GENERIC ACQUISITION PROCESS
3.Due
diligence
4.Closing
activities
5.Merger
integration
1.Build
M&A
strategy
2.Build
business
case
Analysts,
Sales
offers,
Relevance
Analysts,
joint
customer
successes
„Clean“
business
Decision Point
9. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
SURVIVING DUE DILIGENCE – TYPICAL ISSUES
Challenges for the
Target
Challenges for the
acquirer If acquirer´s and target´s products are not integrated
(yet), the product integration effort is hard to guess
If you did not do spring cleaning, you might be in trouble
What is due
diligence?
Complexity of targets leads to high efforts
Can be overwhelmed by workload, compliance and
reporting requirements
Diligent review and evaluation of your business
10. Dr. Karl Popp
mergerduediligence.com
What frequent
acquirers expect
from software
vendors
SUMMARY
Gain trust, get visible and relevant
What do frequent acquirers expect from software vendors?
Prepare well for
getting acquired
Get into the
ecosystem
Get rid of IP-issues
Acquiring and integrating complementors has very high
success rates