Dr. Karl Popp discusses integrating US technology targets with EU software companies. He notes that cultural differences can lead to clashes and emphasizes raising cultural awareness. Typical issues integrating small US targets include complexity overwhelming the target and attrition. A study found that cultural affinity did not increase merger success, and major barriers were the people driving the merger, their experience, and complexity. The PMI approach aims to quickly ship products and align operations. Popp's success factors include choosing integration managers fluent in English with empathy for diverse cultures and experience in post-merger integration, and minimizing attrition through fast and full integration.

1. Remarks on merger integration of
US targets with EU software
companies
Dr. Karl Popp
http://www.mergerduediligence.com

2. Agenda
Agenda
– Avoid the culture clash
– Typical issues and risks integrating small
US tech targets
– Success factors according to study
– PMI Approach for small targets
– My personal success factors in US
acquisitions

3. Avoid the culture clash:
Raise culture awareness and walk on the middle ground
Topic US quotes German quotes
People „i like inspiring and emotional
leaders“
„leaders have to be good managers“
Products „Let us start with a minimal
viable product“
„Before we start let us define the full
blown product“
Processes „we will make it work“ „it will not work before the processes
are defined“
Business
focus
„Marketing and Sales is key“ „Product development is key“
These quotes are meant to emphasize certain aspects, not to insult anybody

4. Typical issues, risks integrating small US Software
targets
• For the acquirer
– Complexity even of small targets leads to high
efforts for integration
• Target
– Can be overwhelmed by workload, compliance
and reporting requirements, size and org of
acquirer
– Attrition

5. Success factors for German companies acquiring US
targets
A study* of 48 mergers shows:
• Cultural affinity did not increase the
success rate
• Major barriers for success were:
– The people driving the merger
– Their experience
– Degree of complexity of the merger
*Kröger, Success and Success Factors uf US-German mergers, 2005

6. PMI Approach for small tech targets
• Goals
– Ship products ASAP, scale revenue
– Align and integrate development and
operations with acquirer ASAP
• Topics worth mentioning
– Globalization and localization of target solutions
to EU might be a high effort activity
– Mind the export restrictions to and from Europe
and data protection laws in Europe
– Mind the success factors

7. My success factors in acquiring US targets
• Choose integration managers who
– Speak english fluently
– Have empathy for U.S. people and diverse culture
– Are very good project managers and problem solvers
– Have experience in post merger integration
• Minimize attrition
• Fast and full integration IF acquirer
understands and can implement the
business model of the target
(administration, sales, development)

8. More information here:
http://www.mergerduediligence.com