Industrial companies have been acquiring technology businesses at a greater rate than any other industry group for the last five years. While companies are racing to getting these cross-industry deals signed, the real challenge lies ahead in integrating the business. To realize the technology deal’s promise and capture its true value, successful acquirers are throwing out their traditional playbooks and following a select few key principles to avoid smothering the target while unlocking its potential.

In this new KPMG report, From industrial to digital with M&A, we argue that while technology businesses present a potential for out-sized returns, these acquisitions present a different and more complex set of integration challenges than their more traditional within-industry counterparts. These challenges include:

  • Value erosion from lack of focus during integration
  • Steep customer adoption curve
  • Strong commercial network headwinds
  • Unmanaged culture convergence
  • Heightened attrition risk and backfill scarcity

 

For more information, download the full reports below.

From Industrial to Digital with M&A

Pressure to digitize product portfolios and internal capabilities in the industrial sector is increasing. Established players are aggressively competing over emerging technology acquisition targets, forming partnerships, and exploring creative deal structures with the promise of a more connected, intelligent, and autonomous industrial ecosystem. The key to realizing the promise of these complex transactions is a careful balance between selective integration and holistic value capture, and a keen focus on talent and culture.

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

READ MORE ARTICLES IN JP EXECUTIVE INSIGHT-ISSUE 1 2023

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