Pros/cons of joining a company that is being acquired?

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Stick5vw
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Pros/cons of joining a company that is being acquired?

Post by Stick5vw » Sat Jun 27, 2020 6:00 pm

I am in the middle of interviews with a company that is being acquired, subject to regulatory approval. Final interview with the hiring manager will be in about 10 days.

Has anyone joined a company just before an acquisition was approved, and if so, any lessons learned, landmines to avoid, key considerations, updside/downsides, pros/cons etc etc?

The role itself sounds interesting, allowing me to pivot from front-line sales towards more leadership/management for a client service team, building and executing upon an operational strategy, with (ideally) interesting exit opportunities in a few years within the larger, enhanced organization. The product platform this team would support does not exist at the acquirer (hence the reason for the M&A), so there is an expectation of few if any layoffs as it is a completely new capability and not a "shared" function like HR, procurement, finance, payroll etc.

Note, it would come with a pay cut (25%) compared to my previous job (I am currently unemployed, wrapping up a career break) but on paper this allows me to build new skills that IMHO would be benefit my CV over the long term.

I am a realist and obviously this could change very quickly however, that senior management is likely to be paid out and depart after the acquisition, with strategy shifts etc to follow.

Nonetheless I am interested in pursuing given the potential to develop new skills, the chance to get back in the market during a tough economy, and for my belief that change (even if stressful!) can create opportunity. Equally I realize the M&A activity hanging over is a huge question mark....

Appreciate any thoughts from anyone that has been through this before. Thank you!

stan1
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Re: Pros/cons of joining a company that is being acquired?

Post by stan1 » Sat Jun 27, 2020 6:12 pm

The role itself sounds interesting, allowing me to pivot from front-line sales towards more leadership/management for a client service team, building and executing upon an operational strategy, with (ideally) interesting exit opportunities in a few years within the larger, enhanced organization. The product platform this team would support does not exist at the acquirer (hence the reason for the M&A), so there is an expectation of few if any layoffs as it is a completely new capability and not a "shared" function like HR, procurement, finance, payroll etc.
With this information you might be fine. Given you are currently not employed and are willing to accept the 25% pay cut to do something different I don't see much of a downside. Worst thing that happens is that you are laid off with some new experience on your resume. That's better than where you are right now.

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Stinky
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Re: Pros/cons of joining a company that is being acquired?

Post by Stinky » Sat Jun 27, 2020 7:04 pm

Stick5vw wrote:
Sat Jun 27, 2020 6:00 pm
The product platform this team would support does not exist at the acquirer (hence the reason for the M&A), so there is an expectation of few if any layoffs as it is a completely new capability and not a "shared" function like HR, procurement, finance, payroll etc.
This might actually be a good thing for you. You might get more visibility in a role like this than one that duplicates the things done by the acquirer.

I’d go into this with a positive attitude, and hope for the best. Congratulations on finding a position in the face of massive unemployment and a pandemic.
It's a GREAT day to be alive - Travis Tritt

BeneIRA
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Re: Pros/cons of joining a company that is being acquired?

Post by BeneIRA » Sat Jun 27, 2020 7:08 pm

Multiple experiences between my spouse and myself of going through being acquired. Can't say the acquisition ever made anything better. Usually the legacy people get pushed out and the acquiring company makes changes to increase profitability. Remember, the bigger company can't just absorb the other company and make zero changes. That new company has to become more profitable or help the bigger company in someway. This virtually always includes some people losing their jobs for "operational efficiency." Would not be surprised at all if in a year you are out of a job with some severance, but if this is your only option, go for it. Go in with eyes wide open, though, that you may be forced out well before five years. If you hear whispers that the new company thinks they can manage the division better than the acquired company's managers, then be proactive and apply before it's too late. Best of luck.

MathIsMyWayr
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Re: Pros/cons of joining a company that is being acquired?

Post by MathIsMyWayr » Sat Jun 27, 2020 7:18 pm

Yes, there will be a fairly big job cut in the overlapping areas soon.

Lalamimi
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Re: Pros/cons of joining a company that is being acquired?

Post by Lalamimi » Sat Jun 27, 2020 7:23 pm

Joined a company right after they had acquired one. Hated the position and the mess that was created. Left after 8 months and joined a company right after they had acquired another. Lots of work, but enjoyed it. Then, they sold a year later. Got a great package. Its all in how they work it. New people sometimes do better than those left behind. Go for it.

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Stick5vw
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Re: Pros/cons of joining a company that is being acquired?

Post by Stick5vw » Sun Jun 28, 2020 5:47 am

Thanks for the responses. The job is by no means in the bag, as I still have the interview with the hiring manager (and I suspect a few other people will get involved before this is decided). But so far the dialogue has been reasonably positive and there seems to be some urgency to get this done.

However, agree there is a "what do I have to lose" aspect to this. My only other quibble at this stage is the lower comp, which I will gently fight against but I sense there is a budget they are working around here.

AnotherMike
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Re: Pros/cons of joining a company that is being acquired?

Post by AnotherMike » Sun Jun 28, 2020 8:24 am

Talk about the acquisition with the hiring manager. Pay close attention to get a sense of where they may be with the new ownership. Regardless based of the situation you described I would roll the dice and take the job if I liked the work.

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cheese_breath
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Re: Pros/cons of joining a company that is being acquired?

Post by cheese_breath » Sun Jun 28, 2020 4:01 pm

MathIsMyWayr wrote:
Sat Jun 27, 2020 7:18 pm
Yes, there will be a fairly big job cut in the overlapping areas soon.
And if they want to keep the best performers and let the other ones go, what will they do with someone who hasn't been there long enough to establish a record?
The surest way to know the future is when it becomes the past.

MathIsMyWayr
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Re: Pros/cons of joining a company that is being acquired?

Post by MathIsMyWayr » Sun Jun 28, 2020 5:03 pm

cheese_breath wrote:
Sun Jun 28, 2020 4:01 pm
MathIsMyWayr wrote:
Sat Jun 27, 2020 7:18 pm
Yes, there will be a fairly big job cut in the overlapping areas soon.
And if they want to keep the best performers and let the other ones go, what will they do with someone who hasn't been there long enough to establish a record?
When a crunch time comes, you need someone to fight for you. Life is not fair, but that is what it is. Anyone who is not closely related to revenue generation or whose job is readily transferable without much difficulty is vulnerable such as administration, sales, legal, IT, ...

UnitaryExecutive
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Re: Pros/cons of joining a company that is being acquired?

Post by UnitaryExecutive » Mon Jun 29, 2020 1:21 am

I've seen it work out for folks where they joined right before an acquisition and got the full RSU packages / handcuffs joining the new company. For technical talent, it's often half a million in RSUs over 4 years and more lucrative than RSU packages you'd get being hired at the company.

There's also a reasonable chance that they eliminate non-essential staff. Sales, operations, finance and marketing typically fall into this category. I'd go in with the expectation of my job being eliminated 25% of the time. I wouldn't count on any promises made by you at this stage as it'll all change once the company is integrated.

If you know the acquiring company, would you join it? The thing about acquisitions is the culture of the company being acquired always shifts toward the acquiring company's culture over time. There are a myriad of reasons for this: arrogance (we acquired you), incentives, etc.

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