I've had the privilege of being a part of some interesting businesses in my career; some that I started, some started by others, a couple of public companies, and at least one company that's been around for over 100 years. From boot-strap start-ups to Fortune 50 companies I've been fortunate to at least think I've learned a few things about M&A from both sides of the table. I'd like to humbly share a few thoughts for those considering the process, who are in the middle of an M&A, or those owners and/or employees who might be in the post-M&A, what-the-hell-have-we-done phase.
1. Once someone buys your company, you don't own it anymore
Forgive the Captain Obvious sound of this statement but you'd be surprised how hard it is for some former owners / founders to get their head around this concept. Many (most?) never do and end up leaving the company they founded bemoaning as they walk out the door how the new owners "don't have a clue" how to run this business. An investment firm or strategic buyer is not generally going to put millions into the business and then let you continue to run it as if you still own it. If you're the one buying the business you would be wise to have a solid plan around what you're going to do if (when) the original owners/founders leave; which often happens in less than 12 months. If you're the one selling the business then negotiate a good financial deal up front as your career with the new company may be short-lived.
2. Your financial constraints won't go away; in fact they may get worse.
"We'll finally have the resources to do all the things we want to do". Uh no, you won't. All businesses, regardless of size, have financial constraints. Bigger businesses may have more money but if they do they didn't get it by buying smaller businesses and giving them unlimited funds. If your a small business being sold to a very large business know that there will be approval processes and budgeting procedures that you'll have to adapt to. The good news is this is not necessarily a bad thing. You may have to development some much-needed discipline around your new product process and you make actually make better, more successful business decisions as a result. However, the sooner you realize that and learn how the new system works the better.
3. There's no such thing as a merger.
In legal terms, sure, but in reality one of the two businesses will emerge from the deal on top. Whether it's two, neighborhood muffler shops combining forces or Compaq and HP, one of the businesses will increase as the other quickly fades from memory (you do still remember Compaq right?). There are a myriad of legal and financial reasons why mergers make good sense but two companies merged into one company is going to look a lot like just one of those companies when the dust settles.
4. Some of your best people will survive the transition and some won't.
If yours is a well-run business you've probably got some super talented and dedicated people at all levels or your business; many of whom may have been there for decades. Talent identification is an important part of the due diligence process as well and any good buyer will won't to know who is important to you organization and will want to develop a retention plan for same. It'd be nice if there was a place for everyone on the new bus after the acquisition but unfortunately there won't be. You have a CFO? They have a CFO too. You have a stud VP of Sales? They think theirs is better. You have miracle-working production manager? They may outsource all manufacturing. You'll catch hell from your wife if your brother-in-law loses his job as a result of the acquisition? They think he's a dumb-ass too and wonder why you ever hired him; just like you do. As the seller, you'll want to start early in the process letting any potential buyer know about your team and who needs to still be around post-acquisition; just know that the decision is there's once the deal's done.
5. Resistance is futile...but maybe not entirely
Yes they own you now and yes they fired your favorite engineer (or she quit) and yes all the drink machines now have SoBe Life Water and Coconut Milk instead of Dr Pepper and Mountain Dew and yes your company car is now a Chevy Volt. That said, there's a reason you or the owners sold the business in the first place and maybe, just maybe some things are better now. Perhaps you and your fellow co-workers have better benefits now? Maybe there are now training and continuing education programs that didn't exist when you were a smaller company. Maybe your new boss IS open to your product ideas. Maybe now you have some upward career mobility that wasn't possible in the previous organization.
Just know that you were acquired because the new owners think you and your organization bring something new to the table that they want and/or need. You may have to "drink some Kool-Aid" and learn to fit in but don't stop being you because that's why they wanted you in the first place. All that said, if the transition is just untenable and you don't feel like you can be successful with the new organization then quit and go start a new adventure. That's what I did.