The tech M&A boom is a mid-life crisis. Older companies think they can stay in the game by absorbing fresh young startups.

The tech M&A boom is a mid-life crisis. Older companies think they can stay in the game by absorbing fresh young startups.

The old-school reason for conducting M&A deals is that one company thinks it can achieve financial synergies by acquiring or merging with a similar company.

But the type of deals being done now represent a change from the norm. By putting a premium on long-term demographics over short-term synergies, acquirers are behaving like glorified venture-capital firms, spreading their risk around by lots of different types of start-ups, letting them stay autonomous, and hoping that a few of them will get huge (Integration? Noooooo!)

For the foreseeable future, buying a hip, young start-up will probably remain corporate America’s favorite way to stave off time’s cruel march, or at least have fun trying.

http://nymag.com/daily/intelligencer/2014/06/millennial-panic-ma-boom-is-upon-us.html

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s