Mergers and Acquisitions

The best source of data comes from mergers and acquisitions. Mergers and acquisitions turns-out to be more acquisition than merger. It is common for an acquiring company to be exploring several potential acquisitions at the same time. This has given me the opportunity to study several companies all in the same industry developing similar software products. I may be consulting for a European healthcare company exploring the acquisitions of one of 5 or 6 companies around the world. It wants to be able to quantitatively compare these companies. In an acquisition engagement, the industry and software product is constant; and I can compare differences in application size, productivity, quality, time to market, and profitability between each of the potential targets. This gives me a unique opportunity to compare and contrast those things impacting productivity and performance. I have repeated this type of analysis several times in many different industries including travel and leisure, insurance, banking and finance, healthcare, aerospace, retail, telecommunications, governments, and software development companies.

One of the inherent problems with gathering data from a potential acquisition is that it is like visiting camp on parent’s day. Many acquisitions can and do exceed a 100 million dollars. Typically, an acquisition can be a large payday for senior executive management of the acquired company. They have a huge incentive to gather up metrics and report the best possible performance. Often, these companies only want to provide data and information on their best projects. They want to put their best foot forward, and it is important for me to dig around and get a good cross section of data.

On acquisitions, I have unlimited access to just about anything I may want to conduct my analysis. I like to poke around on my own. It is common for me to go through numerous functional specifications, time reports, and even salary information to build a quantitative and qualitative picture of a software organization. My objective is to provide my clients the most accurate and representative snapshot of software development companies they may acquire.