Tech Industry Acquisitions

Alcon just walked away from its $430M Lensar acquisition. The FTC blocked it. The stated reason: combining the two biggest players in femtosecond laser-assisted cataract surgery would end a price war that was already benefiting surgeons and patients. That's the regulator's read. Here's the operator's read. When you're 12 months into a regulatory review and you still don't have a clear path to close, the deal math changes. Alcon's CEO said the delay and costs "rendered the transaction unattractive." That's not spin. That's honest deal calculus. This is also the second terminated deal for Alcon in two months. The STAAR Surgical deal fell apart in January on shareholder vote. Two deals, two different failure modes, same company. There's a lesson in that pattern; regulatory exposure and stakeholder alignment aren't diligence footnotes. They're go/no-go inputs that need to be stress-tested before you sign, not managed after you announce. Lensar keeps the $10M deposit. Alcon moves on. And the FLACS market stays competitive. Sometimes the best outcome for operators is the one where you stop before it costs you more than the deposit. https://lnkd.in/eq3AZG8f

Coming from someone who has worked on live M&A projects, I’ve seen why most deals fail to deliver what’s promised. A Boston Consulting Group (BCG) Report says nearly 70–90% of mergers don’t achieve expected synergies. The numbers look perfect on Excel, but execution tells another story. → The biggest reason is the cultural mismatch. Two companies merge balance sheets but not mindsets. When teams can’t align on how to work or decide, integration stalls. → Another is overestimated synergies. Cost savings and growth assumptions often look great in models but rarely play out in reality. → Finally, poor integration planning. Months go into valuation, but little time is spent on how the combined company will actually operate. → A classic example is AOL-Time Warner, a $160 billion merger that collapsed due to culture and strategy clashes. In M&A, signing the deal is easy. The real work begins after. Financial models can predict returns, but they can’t measure chemistry. P.S.: Can you think of any Mergers which failed recently?

I don’t enjoy talking about failures, but when a $𝟮 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 𝘀𝘁𝗮𝗿𝘁𝘂𝗽 𝗰𝗼𝗹𝗹𝗮𝗽𝘀𝗲𝘀 𝗼𝘃𝗲𝗿𝗻𝗶𝗴𝗵𝘁, it’s worth asking why. This week, Sonder Inc., once valued at over $2 billion and hailed as “the next Airbnb meets Marriott”, shut down. After 11 years, the company filed for bankruptcy just one day after 𝗠𝗮𝗿𝗿𝗶𝗼𝘁𝘁 𝗲𝗻𝗱𝗲𝗱 𝘁𝗵𝗲𝗶𝗿 𝗽𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽. At first glance, it looks like a tech integration gone wrong. But the truth runs deeper, and it’s a masterclass in what not to do when building a hospitality-tech business. Here’s what really killed Sonder 👇 1️⃣ The wrong foundation – Sonder’s “master lease” model meant paying fixed rent for thousands of apartments. Great when occupancy is 90%, catastrophic when it’s 60%. They built a hotel chain without owning hotels, but with all the risk of one. 2️⃣ The tech illusion – They called themselves a “tech company,” but their tech was just a digital layer. The core business was real estate, operations, and cleaning, not code. 3️⃣ The lifeline that drowned them – The Marriott deal looked like salvation: access to 200 million Bonvoy members. But the integration failed, costs exploded, and revenue dropped once direct bookings had to go through Marriott (and pay commissions). 4️⃣ Timing and leadership – The founder and CFO left right after the Marriott rollout, a classic red flag. When leadership exits at “the best moment,” it’s rarely a coincidence. So what do we learn from it: - “Tech-enabled” doesn’t make a business scalable. - Operational excellence still beats storytelling. - Partnerships should be tested for dependency risk, not just reach. - If your business model only works in perfect conditions, it’s not innovation, it’s speculation. Failures like this are uncomfortable to watch, but for those of us building in travel and hospitality, they’re invaluable.

Over the course of my career I’ve acquired 10 startups. Here’s what I’ve learned 1. Most acquisitions fail This might sound strange coming from someone who’s done it ten times, but acquiring a company is usually a bad idea. Not because of bad strategy or flawed products, but because of what happens after the deal: integration. You’re taking two teams that barely know each other and expecting them to merge cultures, workflows, and goals. It’s speed dating that ends in marriage, and we all know how that usually goes. If you’re not obsessively thinking about integration from day one, you’re setting yourself up to fail. 2. Write your own acquisition playbook, and keep rewriting At Fiverr, every time we’ve made an acquisition, we’ve refined our internal “playbook.” It starts well before any deal is on the table: identifying potential targets, opening conversations and building trust over time. We don’t sit around waiting for the perfect opportunity to fall into our lap. Instead, we proactively map out companies that interest us and start a dialogue, not always with the intention to buy, but often just to get to know great founders and build meaningful relationships. That groundwork makes a huge difference if and when the timing is right. 3. Never acquire based on short-term opportunity Every acquisition must make long-term strategic sense. It has to align with our mission and deliver real acceleration. You can clone almost any product. What you can’t clone is product–market fit and the people who made it happen. A great acquisition brings you both and gives you a serious competitive edge. 4. People matter more than anything This part is non-negotiable. In tech, human capital is everything. You’re not just acquiring IP, you’re betting on the team that made it work. We look for founders and teams who share our belief in democratizing talent and opportunity. People who want to empower creatives, builders, and entrepreneurs, just like we do. Because from the moment the deal is done, Fiverr belongs to them as much as they belong to Fiverr. If they don’t connect with our reason for existing, nothing else matters. 5. Skin in the game drives alignment Equity is the most valuable thing a public company can offer, more than cash, because it represents belief in future upside. Some avoid using equity in acquisitions for exactly that reason. I take the opposite view. Most deals tie founders to short-term targets: hit your KPIs in two or three years, then cash out. But when someone joins Fiverr, they’re not just running their old business under a new logo. They’re part of the company now, and their incentives should reflect that, not just success in their unit, but success for Fiverr as a whole. Shared skin in the game builds real alignment and a stronger company over time. When you get these right, When you truly believe that 1+1 can equal way more than 2, M&A becomes one of the most powerful tools for inorganic growth.

Most M&A deals don't fall apart because of bad strategy. The reasons are rarely the ones anyone saw coming. After years of supporting clients through M&A transactions — whether buying or selling — I've seen the same three mistakes destroy deals before they even close. 1. Not understanding what you're actually buying (or selling) Yes, you're buying a business. But where does the value really sit? The management team? The long-term contracts? A technology that will supercharge your organisation? A founder who is contractually forced to stay post-acquisition can be more destructive than one who leaves cleanly. At least you know what you're dealing with. Being crystal clear on this isn't just strategic. It determines how you structure the entire deal. 2. The valuation gap nobody talks about until it's too late Sometimes the seller expects a fixed price. The buyer expects to adjust based on diligence findings. Nobody clarifies this upfront. A $500k adjustment to EBITDA doesn't cost the seller $500k. At a 10x multiple it costs them $5M. Most sellers only understand this when it's too late to walk away. 3. Financial information so poor it's impossible to rely on No audited accounts? Then how do you trust any of it? The profit, what's owed, what it actually costs to keep the lights on? I've seen this leave deals dead in the water. So what can you do to give yourself the best chance of a smooth deal? → Know where the value sits and structure the deal to protect it. The org chart won't tell you. Dig deeper. → Agree upfront whether the price is fixed or subject to adjustment. This single conversation, had early, prevents enormous pain later. → Get your financial information in order before you go to market. Audited accounts are the floor, not the finish line. Your management accounts need to reconcile with them too. A deal doesn't need to be perfect to succeed. What kills deals isn't complexity. It's surprises. And most surprises are avoidable. I've shared mine. What's the mistake you've seen kill a deal that nobody talks about? #MergersAndAcquisitions #DueDiligence #CapitalAdvisory #Deloitte #M&AStrategy

Most roll ups don’t fail because of competition. They fail because integration was treated as a future problem. The pitch always sounds the same. Buy fragmented assets. Centralise back office. Unlock synergies. Scale. What gets skipped is the hard part. How these businesses actually work once they’re stitched together. Different pricing logic. Different sales behaviours. Different tech stacks. Different definitions of performance. So the platform grows on paper while reality fragments underneath it. Everyone is busy. No one is aligned. And every new acquisition quietly increases complexity instead of leverage. By the time integration becomes urgent, the platform is already brittle. At that point, scale isn’t an advantage. It’s a multiplier of dysfunction. That’s how roll ups stall without ever technically failing. #ClaymorePartners #notveryprivateequity #PrivateEquity #ValueCreation

70% of all deals die for these two reasons And it is totally in your control Quick story - I was coaching a client on a major deal It was stalled at the Director level The "Functional Level" could see the value But the executive team was asking themselves? "Would it get used" "Would it have an impact" Their strategy before we spoke was to keep hammering the Director with case studies, proof points, and value statements to share with the executive team. When I heard that, I said, "stop! They simply don't believe you." Instead, go answer the question for them: Step 1. Call end users & survey them Step 2. Visualize end-user feedback with real people and issues Step 3. Put together the current state and future state workflow Step 4. Align those things to a key business priority Now, you have highlighted the real problem in the field, the exact areas of improvement, the commitment from the people who would use it to solve the problem, and the executive priority that will be achieved based on the outcome. They took this approach and presented it...project approved The reason 70% of all deals die? Not getting to enough end users, and getting the executive team to see the problem and the result. If you only sell to the middle - deals get stalled You need to involve ALL levels in your deals

Tech consolidation has a ton of potential for both buyers and sellers and yet often fails. Here are the most common reasons: Failure 1 - Waiting until renewal. Buyers and Sellers wait until the renewal to have the expansion / consolidation conversation. Replacements take time. Evaluation, stakeholder alignment, securing buy-in, change management are hard to rush. Plus it ignores other timelines such as when competing solutions’ contracts expire. Failure 2 - Not enough emphasis on Sourcing. The sourcing machine isn’t firing on all cylinders because it often takes a backseat to tactical tasks. The market is evolving incredibly fast and yet no one is focused solely here. It lacks true ownership and I’ve rarely even seen it as an OKR. Failure 3 - Expansion proposals come across as self-serving. Sellers pitch bundles without tying to outcomes. They state “We noticed you also use X” without understanding why. The savings math feels exaggerated and the risks downplayed. Buyers leave the meeting feeling like it’s an upsell rather than a true significant opportunity / advantage. Failure 4 - Product gaps seem too big. Stakeholders fear the loss of functionality. In reality, sometimes the benefits of the platform outweigh the value of the point solution and sometimes they don’t. In other situations, the platforms have truly evolved to be on par with previously dominant point solutions. Failure 5 - The pain not significant enough (yet). You have Google but continue to use Zoom. They say consolidation is important but can’t fathom making these switches. What’s interesting is to see the evolution of the company cycle. What was once thought to be “off-limits” is changing. It starts with aligning incentives internally. Failure #6 - They lack visibility and knowledge. It starts with understanding what is in your stack, when contracts expire and where the opportunities are.  Consolidation feels like a vague goal but lacking prioritization and know-how (Thursday’s post will talk about how Tropic is changing this). Failure #7 - Buyers overestimate change management. Sellers underestimate it. AI is having a big impact. Intelligent agents can map processes, build integrations, and measure outcomes in real time. New suppliers are truly doing things better than long-standing incumbents. Howevr, sellers don’t always do themselves a favor when they minimize the risks associated. “We’ve done this a hundred times.” “Customers are usually live in 30 days.” No real acknowledgement of internal politics, shadow workflows, or the fact that half the value is tied to habit, not features. It’s kind of ironic…consolidation usually fails for human reasons, not technical ones. P.S. For the first time ever, I’m doing a “theme of the week”. Starting yesterday, each post this week will be about this Tech consolidation. And of course will be designed to benefit all parties - procurement, sales, CS, finance, IT etc.