Key issues you should consider before signing an international merger deal

GettyImages 170224184

Ben Boissevain Contributor

Ben Boissevain is the founder of Ascento Capital, a boutique investment bank that provides advisory services for M&A, capital raises and valuations to technology companies in the U.S. and internationally.

More posts by this contributor

Despite the war in Ukraine, accelerating inflation and increasing interest rates, the technology sector has still seen M&A happening in the United States. In the first half of 2022, large tech M&A transactions included Microsoft acquiring Activision Blizzard for $69 billion, Google buying Mandiant for $5.4 billion, and Elon Musk bidding for Twitter for $44 billion.

Private equity was also active in the tech sector, with Thoma Bravo purchasing SailPoint for $6.9 billion and Vista Equity Partners acquiring Citrix for $13 billion. Cross-border tech M&A included Deutsche Telekom’s acquisition deal with SoftBank Group and T-Mobile U.S. for $2.4 billion and Siemens acquiring Brightly Software for $1.8 billion.

READ:   Spotify exits short-lived Car Thing hardware play, as reports Q2 MAUs of 433M, offsetting Russia exit and service outage

European and Asian companies can compete effectively against both U.S. companies and private equity by offering greater target management responsibility post-transaction, flexible transaction structures and global distribution of the target’s products sold with the acquirer’s sales team. By understanding the key issues in cross-border tech M&A, an international acquirer can close a successful transaction and achieve its commercial objectives in the United States.

Acquisition criteria

Management teams, boards and shareholders have had time to adjust to the drop in valuations and will be more amenable to an acquisition at a reasonable price.

Prior to approaching targets, it is important to establish detailed acquisition criteria.

Acquisition criteria can include the subsector, product set, revenue, profitability and customer profile. It should also include more intangible aspects, such as vision, culture and strategy. Management team strength is also important, particularly if the international acquirer is following the private equity playbook and acquiring a platform company with the intention of acquiring smaller add-on companies later. Finally, practical criteria should be considered, such as geographical location — if the international acquirer is in Paris, a flight to the East Coast is much shorter than a flight to California.

READ:   Apple's Downtown Brooklyn Store is 'temporarily closed'

Target research

Once the acquisition criteria are established, in-depth target research is required. This research should include target financing, capital structure, leadership and industry reputation. Research should include databases such as Capital IQ, PitchBook and Crunchbase, as well as confidential discussions with industry leaders at other companies in the subsector and industry trade groups. This industry insider knowledge can be very powerful.

Acquirer’s presentation

SOURCE: TECHCRUNCH

(Visited 1 times, 1 visits today)

Only authentic Gist, News and Gossips around Nigeria.

Related Posts

us-antitrust-officials-ask-to-be-heard-in-epic-vs.-apple-appeal

U.S. antitrust officials ask to be heard in Epic vs. Apple appeal

AppleInsider is supported by its audience and may earn commission as an Amazon Associate and affiliate partner on qualifying purchases. These affiliate partnerships do not influence our editorial content. The US Department of Justice has requested to participate in the appeals hearing regarding Epic’s case against Apple’s App Store policies. Apple and Epic Games are

tesla-ordered-to-tell-laid-off-workers-about-lawsuit

Tesla ordered to tell laid off workers about lawsuit

A U.S. District Court has ordered that Tesla must tell employees about a lawsuit alleging the automaker violated state and federal law by requiring workers to sign separation agreements. Two former Tesla employees filed the suit in July, alleging that the company required them to sign releases in exchange for less severance than federal and

iphone-14-reactions,-best-ios-16-features,-and-how-to-benefit-from-focus-filters

iPhone 14 reactions, best iOS 16 features, and how to benefit from Focus Filters

AppleInsider is supported by its audience and may earn commission as an Amazon Associate and affiliate partner on qualifying purchases. These affiliate partnerships do not influence our editorial content. Everything you need to know about the iPhone 14 Pro launch and that 48MP camera, plus what’s best in iOS 16 — and in the forthcoming

autonomous-electric-truck-company-einride-rides-into-germany

Autonomous electric truck company Einride rides into Germany

Autonomous and electric truck maker Einride is rolling into Germany, representing its first new market in Europe outside its native Sweden. Founded out of Stockholm in 2016, Einride has raised some $150 million in funding to commercialize a cab-less autonomous cargo truck, one that can be controlled remotely if required by human operators. It’s a

original-iphone-stars-in-stephen-king’s-‘mr.-harrigan’s-phone’

Original iPhone stars in Stephen King’s ‘Mr. Harrigan’s Phone’

AppleInsider is supported by its audience and may earn commission as an Amazon Associate and affiliate partner on qualifying purchases. These affiliate partnerships do not influence our editorial content. Netflix released a trailer for “Mr. Harrigan’s Phone” and it modifies the timeline of the original story so the main characters each have an original iPhone.

tencent-lays-off-nearly-all-of-staff-at-its-gaming-site-fanbyte

Tencent lays off nearly all of staff at its gaming site Fanbyte

The first rule of conducting layoffs is to not be a jerk about it. The second rule is to make sure the social media manager you just laid off doesn’t still have access to your accounts. Today, Tencent violated both of those rules as it laid off nearly all of the editorial staff at Fanbyte

Leave a Reply

Your email address will not be published.