Acquisition-integration woes

Our top story for this issue is the falling out of the Infinity Technologies leadership team with On The Go Technologies of Concord, Ont.

This news, as you can imagine, is quite surprising given the publicity surrounding their deal a little under a year ago.

On The Go’s CEO Stuart Turk has an excellent track record of acquiring companies such as CompuQuest, Vital, Go Motion and Helios/Oceana. Earlier this year, On The Go acquired Island Computing and Solutions in Computing.

At the time of the Infinity purchase, Turk told us he was building an empire. A key part of his acquisition strategy, he said, is to keep the founders in the fold.

On the surface it looked as if the Infinity deal would be another successful acquisition.

But, it hasn’t worked out that way and Infinity’s Frank and John Abate have left the company.

No matter who is right or wrong in this dispute, it looks bad and no amount of words from either party is going to adequately satisfy the market or fix the problem.

Any CEO worth his or her salt will tell you that acquiring companies is easy. Integrating them within an existing culture is the tough part.

The best that I have seen at this game is Cisco Systems Corp. and its CEO John Chambers. The reason why it has been easier for Cisco than others to acquire and integrate companies is because it has an integration department whose sole purpose is to deal with new employees, new technology and new culture.

Over the past decade Cisco has acquired more than US$20 billion worth of IT firms, including major acquisitions such as Linksys and Scientific Atlanta.

You never hear of any problems coming out of Cisco from its acquisitions. I am sure there are some challenges, but this dedicated team irons them out.

Most companies do not have these types of resources, I admit. Which is why firms, especially solution providers in Canada, should take a slow and steady approach to acquisitions: make sure you have one properly integrated before you start acquiring others.

Looking at a Cisco or even the relatively smooth Symantec-Veritas merger could blind a CEO into thinking this stuff is easy, but it’s not.

The late Michael Schweitzer of the RAM Group always made sure to properly align his new acquisitions before going after another — and he pulled the trigger on several high profile deals such as Genicom, Questech, and Cemtech.

Solution providers should be very careful when acquiring others, especially if they are of equal size or are high profile in the industry like Infinity. Make sure the deal is a win-win or it may be more prudent to just walk away.

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Jim Love, Chief Content Officer, IT World Canada

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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