By "ruin" I mean the less tangible parts of the smaller company, such as the culture, the enthusiasm and spirit, the flexibility, the overall happiness.<p>Having now been in two medium-sized companies that have been acquired by large, public firms, I find that everything we enjoyed is gone. Perks slowly disappear; meetings, trainings, and general wastes of time increase; productivity slows; engineers become demoralized; processes grind through bureaucracy. As I understand it, this is typical.<p>What are some examples where acquisitions like this have happened and the smaller company wasn't essentially destroyed?
So, one thing to keep in mind with all of this is that, if it was a small, fast-growing startup that got acquired, there was zero chance of it staying that way even if it did not get acquired. Being small and fast-growing for very long, is by definition impossible. In many cases, when a smaller company gets acquired by a big one, it's because they have hit the point where the founder of the smaller company realizes that their company's infrastructure and culture aren't going to work at a large scale, so they would rather offload the task of turning into a big company to somebody who already knows how to do that. But, even if they hadn't, they usually would have had to turn into something that looked a lot like the big company they got acquired by, anyway.
Google acquiring YouTube<p>"In the Plex" by Steven Levy goes into great detail on how YouTube could not survive its growth without the infrastructure and ad technologies Google brought to the platform.
NeXT with Apple is a pretty solid canonical case. In that situation, it really became a reverse acquisition with Steve Jobs regaining control of Apple.<p>We've done a number of acquisitions - and most seem to have done well. A big portion of that is recognizing that you are not only acquiring the company - it's IP and people - but also it's culture. If you don't want that culture - if it's not better then yours, you don't want it.
Dassault Systèmes acquiring Solidworks.<p>Most users don't know that Solidworks, which is well know as a mid level solution for CAD, is actually owned by the French company developing CATIA, which is practically used by every single serious manufacturer in the world (from automotive to aircraft to ship to factory to you name it).<p>The geometric kernel powering these two is now the same, but it wasn't for years. I guess it's a good illustration of why this acquisition was successful and didn't ruin Solidworks: the company was left practically untouched for more than ten years. "assimilation" took place at a very slow pace (almost cosmological for a software company).<p>Now the question to ask is more why the acquisition is taking place. To get a list of customers? To get skilled contributors, or knowledge, or patent, or a piece of technology? To get a presence in a different country? All or a part of this? To kill a competitor?<p>Anyway you put it, acquisition is not a neutral move. It's always joining a bigger structure, hence jumping to a later stage and size at extreme speed. Considering how difficult it is for a single company to get through its different stages by itself, it is normal that acquisitions are hard for acquired companies. Assuming the objective is not to kill the acquired, tremendous efforts will be needed on both sides to make it work. The acquiring company ramping up newcomers, on new actual processes, on new ways of doing; the acquired one to agree to it, and accept that it is the cost to pay to operate at a higher scale.
Booking.com was acquired by Priceline for 100M in 2005. Now it's >80% of value and revenue of the parent company. By that logic, booking's value peaked over 80b$.<p>I was there from 2010-2017. The philosophy of the holdings was to let its constituent companies execute independently and even compete (this included Priceline.com, Agoda, Kayak, rentalcars.com, OpenTable, etc). Therefore the culture of booking.com remained fairly intact for a very long time.
(background: I work in tech mergers and acquisitions for a company that does pre-acquisition diligence.)<p>It is worth noting that, most of the time, the things that are so wonderful about working at the small company are fun for all the same reasons that they aren't sustainable. Most startups are not cash positive - they don't make money, they just lose money more slowly than they get investment (by selling off bits of the company). So very often, the stuff you want to have continue just can't because it was based on imaginary income. The exit plan always involves the company becoming profitable at some point (maybe after multiple rounds of acquisitions) and that usually means that on each round the company has to become more realistic about how they spend their money, including how they manage their devs.<p>On the other hand, it's true that a small lifestyle company can keep many of those things, but they do that by not having a plan to sell, which tends to mean you get the spirit and independence but not the throwing-around-cash-like-it-was-free fun times.<p>When you factor in opportunity-cost, the whole office plays lazer tag on friday is really bloody expensive.
Salesforce recently acquired Tableau and from what I hear the acquisition has probably improved things at Tableau.<p>This is a very special case though! Tableau is a company with a lot of Fortune 500 buy-in, but an aging development stack and business model. So this is the case of a somewhat more dynamic larger company acquiring a set of customers and some fundamental tech.<p>Usually acquisitions are from big/slow/established/monopoly acquiring an upstart and it’s no surprise that usually ends up badly.
The Acquired podcast does case studies of successful acquisitions:<p><a href="https://www.acquired.fm/" rel="nofollow">https://www.acquired.fm/</a><p>It's an amazing show
This sounds more like small company vs big company culture, rather than specifically the effects of acquisition. Some folks are much happier at a small, nimble company. Some folks like the stability and predictability of a larger company. Sounds like you're in the former camp.<p>There are cases where the acquired company is left to run more-or-less independently, and its stock is just owned (or majority-owned) by the acquirer. But that's probably the exception rather than the rule. Usually, if you get acquired, you're now an employee of Big Co.
>I find that everything we enjoyed is gone. Perks slowly disappear; meetings, trainings, and general wastes of time increase; productivity slows; engineers become demoralized; processes grind through bureaucracy. As I understand it, this is typical.<p>The first time I was in a company that got acquired, this happened. Then it got acquired again by an even bigger fish and it didn't really happen because it already sucked after the first time.<p>The second company that got acquired it also happened. Usually the suck starts after a year when managers try to increase their bonuses by finding "synergies," which really means cutting employees through consolidation and adding a bunch of unnecessary friction to the development process.<p>The lesson I've learned is if you get acquired, you've got about a year to get out or you will be miserable if you aren't the big-co type. I made the mistake of staying too long both times it's happened to me.<p>To answer your question, I've never been at a company that got acquired and it was better for me.
Deloitte's acquisition of BearingPoint's Federal practice in 2008-9. Fascinating to watch from the inside -- literally the same people increased revenue & margins with happier employees, primarily driven by implementing a better management and incentives culture with better HR practices. Also interesting that Deloitte hired their corporate M&A integration group to run the integration for themselves.
OP - Of your 5 criteria, 2 will change by the very nature of what it is to be acquired. The other 3 are essentially 1 (how excited are we about this change?)<p>Culture: there's different people around, now. So culture necessarily changes.<p>Flexibility: bigger companies are less flexible because there are simply more people. Even if every individual is more flexible, it doesn't matter.<p>Enthusiasm, spirit, and happiness - are these not synonyms, in this context? And if they are, are they not reactions to external factors (culture & flexibility)?<p>I would suggest your question may be tautological: big companies will always ruin small companies from the perspective of someone who likes small companies because the small company became big.
I'm probably answering too late to not get lost at this point in the sea of people answering regarding products not being ruined, but as far as actual company culture, E Systems survived quite well and intact after being acquired by Raytheon in the late 90s. One of my earlier jobs in Richardson, TX was at a facility that originally belonged to E Systems and I worked on one of the longstanding programs they'd had for decades. It very much stood out as being nothing at all like the rest of Raytheon. They had exemptions for nearly every corporate policy. People on any other program got moved around at will to meet the needs of the larger company, but anybody who had been with E Systems stayed exactly where they wanted to be doing what they wanted to do, even decades after the acquisition. They kept all of their original scheduling policies, continued using the same project management methods and tech stack without having to give in to corporate flavor of the month "Agile DevOps transformation" stuff that everyone else had to do.<p>It's honestly probably still the best job in software I've ever had, and the actual system I worked on is still the most impressive I've been a part of, the exception to the rule of government shit projects, heavily classified but absolutely miles ahead of the closest commercial analog. If the pay wasn't so low, I'd gladly still be there. It's a dream job in every way except compensation.
Oracle acquiring Sun.<p>I know there is a lot of Oracle hate but: MySQL, GraalVM (Java), Sun hardware (both Exa* and SPARC), VirtualBox and many more technologies are better today than prior.<p>The challenge Sun would have had, regardless of Oracle or not, is that they were solidly in the On-Prem business ... and the market has moved to Cloud.
Cisco's acquisitions. There's a book about them. The Crescendo switch acquisition was extremely successful and they became Catalyst switches.
LVMH has purchased a lot of companies that have maintained success, but they are a holding company that runs companies more as independent subsidiaries. If software followed this model it might be alright, but most of the acquisitions by big companies are trying to merge the new company into the old, vs. buying, running and sustaining a company as a continuing business.
I don't know what it's like from the inside, but from the outside the acquisition of Oculus by Facebook has gone much better than I expected. I really thought Oculus would be gone within a year, but they've continued to put out some great products. Other than the misstep about requiring Facebook accounts, it seems like a success.
Sadly Heroku/Salesforce used to be my go-to-example here, but that fell apart a few years ago when they effectively froze new feature development.
Cisco bought Duo Security, and by all accounts from the people I know that work there, the culture is pretty intact and people happy. Maybe that has changed in the past year or so, though!
While not answering the question, I think a lot of companies are acquired in a state of immaturity and then comes the problem of succeeding as actual grownups. Everyone blames the acquirer but it's not that simple. I work with a group that still has leftover ego-execution mismatch and it's tiresome.
Amazon owns the following companies selling books:<p>- AbeBooks (acquired by Amazon in 2008)<p>- Book Depository (acquired by Amazon in 2011)<p>These companies don't appeared to have changed dramatically from when Amazon bought them. I wonder if these companies operate 'independently' without too much undue influence from Amazon?
At least in the case of (many) startups, most are built with acquisition in mind. Many time perks are there only to attract talent to get the company to the exit, but aren't part of the long term business plan.
2005: Yahoo! invested in Alibaba buying a 40% stake in the company for US$1 billion.<p>2014: US$10 billion in Alibaba's IPO alone to Yahoo.<p>2019: Altaba (yahoo remains owning Alibaba+YahooJapan) liquidates for US$40 billions.
VMware's acquisition by EMC went well for most of the employees (at least during the initial years). For all practical purposes, EMC left VMware alone.
This happens all the time. It is essentially the business strategy of many (not all!) conglomerates. Scoop up successful companies and let them keep running as they are, sometimes with even greater success due to things like access to money and peers. I've worked for a few subsidiaries through the acquisition process, and aside from some accountants showing up once a year, everything remained the same.
When I was involved in M&A for a Fortune 20 company, the rate of failures for M&A we were told by various accounting firms and consultants was that 90% of all M&A never achieve the goals of doing it. So 10% success rate on a good day.
<a href="https://www.motherson.com/company/history" rel="nofollow">https://www.motherson.com/company/history</a><p>This company does decent M&A in the auto ancilliaries industry
Linkedin and Github acquisition by Microsoft.<p>Github and Linkedin both have their own culture, perks, and the companies are run independently. Infact, Linkedin pays better than Microsoft and are overall happier.