Between 1993 and 2000, Cisco became a role model of tech M&A, making 75 acquisitions over those seven years. At its peak, those acquisitions collectively represented 50 percent of Cisco’s revenue. We learned a lot along the way. In my previous post, I explained two of my six key principles of a successful acquisition strategy: keeping objectives consistent and understanding probability. In today’s post, I’ll describe the remaining four.
3. Option value
Another way to look at this issue of probability is that big acquirers are actually purchasing options in the future success of the acquired entity. These options tend to be worthless, but about 20 percent of the time, they produce a huge outcome.
To read the full, original article click on this link: Six Key Principles of a Successful Acquisition Strategy, Part 2: Tech News and Analysis «
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