Technology and M&A

In the last Eneas Magazine’s issues, we focused in the less numerical aspects of the mergers and acquisitions world inside the cultural business, the angle, the human factor, the strategy, the cultural differences of each country, the personal emotions, the empathy in negotiations, etc: and we have argued about the complementary of the purely and objective numeric aspects in qualitative matters. In this article we want to link the mentioned range of articles with an equally qualitative aspect as technology is.

Our globalized world has experimented and experiments a development stage mainly characterized by technological and scientific discoveries in all the fields, but especially in the Information and Technologies Communication Sector (ICT) area.  The novelty in the constant technology advance of humanity, that is has been producing since the dawn of times, it is not that new that sciences and matter application and investigation fields are discovered, for example, but rhythm, the velocity in which new technological discoveries and advances are happening. Especially in ICT field.

“Logically the business world it is not alien to this technical advances, being in fact one of the pioneers in a large proportion   of this new discoveries.”

The private investment in technological advances is clearly a key to understand society’s ”digitalization” process and the work. Undoubtedly any individual and any company behaves as 15 years ago. Internet and the ICT have changed the way we interact, work or even the way we make money. No one imagines now a world without connectivity or an industry of any kind without ICT.

This rapid pace of innovation and changes forces us to modify our way of thinking and therefore our way of financing and investing. It is not the same to buy a leading company in IT integration than a company where bills are barely digitalized. At every levels both for the good or bad of the company. Since technology also brings new risks that were previously not existing, especially at a network level, with possible steal of information, hacks and various acts of sabotage, which can also be done from thousands of kilometers away, without even knowing in detail the target company.

All this changes and novelties in the world must be considered when valuating a company, thus with people’s knowledge, they have became the main wealth creation sources in many companies, besides of launching a great change in the economy and the society that entourages us.

The way and the mode in which a company welcomes new technologies, has currently a new key role in our economy and the knowledge society, since in many cases the most valuables assets of the companies are not tangible assets (machinery, buildings, facilities, banks deposits, stocks…), even the ”traditional” intangible assets, that is to say, values, attitudes, know how, and people’s abilities which are part of the company; nowadays is more valuable the level of innovation and penetration of new technologies in the company.

 And certainly not only focused on IT, but encompassing all technologies that can interact with the activity of a company, for example by having the latest robotic machinery or by including the possibility of telecommuting.

“These aspects are crucial nowadays when valuing a company, as the interweaving of technology in the daily activity of any company is extremely high. And therefore we must assess both its pluses and its risks, arising for example from overexposure to innovation, as having incorporated not tested technologies or outside the technological “mainstream”; or even dispose of obsolete and outdated technologies.”

A company can be particularly innovative but for example do not have covered the risks of working in the “cloud” or do not have  a contingency plan in case of failure of technologies; so it is necessary to know and evaluate technology in all its aspects, both opportunities and risks that it has.

For all these reasons, and emphasizing that the growing importance of technological assets in the process of buying and selling companies creates new complexities when carrying out the transaction; it is essential to have an expert advisor on business transactions such as Eneas Advisory.

“An incorrect analysis of technology in a company can lead to the failure of an operation. If there were enough reasons for a company  to be  advised from experts in M&A, the technological aspect represents an incentive to have an external consultant.”

In our case we know in depth the challenges of technology in any transaction of M&A, having successfully helped solve multiple scenarios where technological assets were a determinant point. We live new and vertiginous times where technological evolution is constant and constantly present in the business world, and in Eneas we are not strangers to these challenges, we adapt to a world in motion and constantly changing to provide the best possible solution for each moment and situation.