Good Acquisition, Bad Acquisition

Why M&A, what makes a horrible (and home run) deal, and real life examples of both

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Hi, friends 👋

I’ve been really looking forward to writing this post for a while now. M&A is something my team and I have been working on for the past 2ish years, and it’s also something I’ve been fortunate to have experienced from both the buyer and seller side.

Sometimes things go well, but very often, it’s a shit show. Company A likes the idea of owning Company Y (for reasons we’ll talk about), both companies sell each other on why the deal makes sense (often making overly ambitious promises), and then comes the hard part—the post-deal integration.

Combining teams, culture, technology, data, or other advantages is an extremely hard process. When all is said and done, value is often eroded, great people churn, customers get pissed, and it ends up being a bad acquisition.

Of course there are great acquisitions too. Meta for one certainly would not have been the type of company to add $200B in shareholder value in a single day if they hadn’t acquired Instagram.

Simply, M&A can be one of the greatest levers to pull as a company to grow. But it can also be a death kiss.

So, let’s unpack this powerful growth/anti-growth lever. This deep dive rifts off my own first-hand knowledge, lots of deep research, and also the very generous help of my investor friend,

Rex Woodbury

, who has way more knowledge of, and proximity to, acquisitions than I do.

Here’s what we’ll cover in today’s subscriber-only post (I think this is going to be one of my better posts yet).

1. Why acquisitions?

2. Bad acquisition

   1. What makes a bad acquisition?

   2. Examples

   3. The bad bonus: And how do you recover? 🩹

3. Good acquisition

   1. What makes a good acquisition?

   2. Examples

4. Discussion: What are some “dream” acquisitions?

Cool, let’s talk deals baby. 🤝

“Would you like to hear by favorite passage form Shakespeare? Take the fucking money”

p.s If you’re not a paid reader yet and are on the fence, besides unlocking this post right now and past premium editions, here’s the next three topics I’ve been thinking about writing in this column:

• The new couch problem

• Is your product like a Japanese coffee shop? If not, why is should be.

• The sparkle emoji is not the answer

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