By Carl Grant, Senior Vice President of Business Development at Cooley LLP
If you are looking to be acquired to help support short and long-term growth, what are the most important things that you and your Board look for in a potential purchaser? How do you view being purchased by a larger, possibly competitive, company?
I recently read an article in Inc. magazine regarding the acquisition of Zappos by Amazon.com for $1.18 billion in stock. The article included excepts from a book written by Zappos CEO Tony Hsieh entitled, “Delivering Happiness: A Path to Profits, Passion, and Purpose.” What is interesting is how Tony was focused on finding investors whose values were aligned with Zappos’ values and its focus on corporate culture.
Unfortunately according to Zappos, the company’s investors, Sequoia Capital, had never bought into the company’s focus on corporate culture and was looking for an exit due to the economy. But, fortunately for Zappos, it found a good marriage with Amazon.
In fact, Hsieh describes the all-stock deal as a married couple opening a joint bank account. Even with the acquisition, he remained as the CEO of Zappos and considers Amazon as a giant consulting company to assist with things like redesigning the company’s warehouse systems.
Does this deal prove that acquisitions that are more of a marriage, not a hostile takeover, can be successful? If you look at Zappos’ growth in 2010, the answer is, “absolutely.” In Q1 2010, Zappos’ net sales were up almost 50%.
Has your company approached an acquisition by another company, or of another company, as an amiable marriage? Do you see an advantage to this kind of acquisition over takeovers and other less amiable deals? Drop us a comment and let us know.
Disclaimer: The postings on this site are my own and do not represent Cooley LLP’s positions, strategies or opinions.