Questions to Ask During a Merger or Acquisition

Mergers are different from acquisitions because the two companies are equal (for the most part), and they make the joint decision to combine forces. An acquisition is typically a takeover of a smaller firm by a larger firm. Most of the announcements in the HCM space are acquisitions, but we have seen a few mergers over the past year, including Shaker and Montage (ModernHire) and, most recently, Kronos and Ultimate Software.

Kronos and Ultimate Software can easily be characterized as equal companies coming together. They both have 6,000 employees, both have revenue of nearly $1.5 billion, and both went public and then went private again. But, more than anything, they both have the type of leaders who would come to your home if you were sick and cook you a meal and babysit your kids. It’s the type of leadership that was built on a foundation of kindness and decency. In technology, this type of leadership is rare.
While I do have some early thoughts on the merger of these two firms, some of my friends like Lance Haun have done a better job covering this announcement. But I have been thinking about mergers and acquisitions and what I would want to know if I were a customer.

So, here are a few questions that customers and prospects might want to consider when faced with a merger or acquisition:

– What is the timeframe for change? When can customers expect to see changes to the company or products?
– What are the goals of this announcement? Are the revenue and product goals realistic?
– Will any office locations or headquarters change in the next year?
– Are there any plans to add headcount to the new organization?
– Will there be a rebrand?
– Are there future acquisitions or mergers planned in the next year or two?

– What will happen to the current leadership team? Are there a certain number of years leaders are required to remain with the new entity?
– What are the plans to retain key customer contacts, including sales, customer support, and services? Are there short-term or long-term plans to consolidate these functions or replace these functions?
– What will change for implementation teams and support? Will there be a transition period that will impact implementation timeframes?
– What is the morale of the current employees at both companies? Are they excited about the announcement or concerned about their future?

– Are there any plans to sunset the brand of one of the companies?
– What is the investment in research and development moving forward?
– What are the plans to integrate these products?
– What products will be the focus moving forward?
– What is the product roadmap for the next six months to a year?
– Will customers be involved in product development?