Factors contributing to failed acquisition hypothesis

[Anonymous]

Reading about the factors going into a failure to achieve the hypothesis put together in the early business case for an acquisition, I’m curious to hear from my peers in the industry. Without naming names, what was the cause of failure for the worst deal you’ve been involved in?

At one company, we purchased a start up company that was using AI aggressively in a product set that we hadn’t yet introduced AI to. The leader of the start-up company was very impressive to the president of the company I worked for, and therefore, the acquisition was somewhat for technology but primarily an acqui-hire. The impressive leader we received with the deal, however, thrived in a very start-up world with few emails, little bureaucracy, freedom to make immediate decisions, etc. She went from a company of ~20 to a company of ~13,000, and she left within 12 months of the deal (likely as soon as the retention package was gone). In retrospect this is imminently foreseeable that the culture change was too dramatic, but it had a big impact on the initial deal value.

[Author]

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