M&A Integration: Creating Value from “Acqui-hires”

Talent Acquisition Process

  • Driven by a shortfall of engineering talent or highly skilled and specialized workers.
  • Talent typically comes from start-ups to accelerate hiring e.g., NPV of acqui-hire > organic recruitment execution.
  • Cohesive teams work together; typically founders have prior working experience with Product Dev executives of the acquirer.
  • In-country, offshore resources are remote acqui-hire candidates (Microsoft made exceptions)
  • Transactions can be originated by corporate development or engineering leaders. Speed from identification to deal close, transaction evaluation metrics and motives can vary based on origination.
  • Accompanying businesses or products can be kept alive or wound down based on the level of compatibility with the acqui-hire strategy.
  • The level of cohesion, maturity, price, and motive could vary based on whether they are in the Series A vs Series B stage
  • Angels’vs venture capitalists — funding can create multiple third-party stakeholders with different motives.

Talent Acquisition in HR

  • Time to close the transaction
  • “Productivity day one” (onboarding effectiveness)
  • % Employees retained after 12 months
  • % Executives retained after 12 months
  • Acqui-hire NPV of current transaction > NPV of prior transaction > NPV of organic recruitment
  • Employee engagement scores
  • Skill transfer rate (to the acquirer)

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