A couple of thoughts from my pile of tearouts during my just completed China trip. First:
I am considered to be an avowed enemy of acquisitions, and I can understand why. I do indeed decry the typical "Fat 'n Ugly + Fat 'n Ugly = Quick and slick" "logic" behind giant get-togethers of mediocrities for defensive purposes in industries in distress.
On the other hand, there is an acquisition type I applaud, and the Wall Street Journal recently (0703) featured just such a pairing. GE plans to take on Pratt & Whitney in the turboprop market. To spearhead the effort, GE has just completed the purchase of Walter Engines, an 85-year old firm from the Czech Republic—Walter, the WSJ reports, "earned a reputation ... for building rugged propeller engines used heavily in Eastern Europe and niche markets such as agriculture and cargo planes."
Bingo! Fill a need-hole by paying top dollar for a superb, well-regarded firm of modest size that complements your main business. Of course, achieving the desired result is not easy, as the melding of the desirable practices of a non-bureaucratic, independent, and proud firm into a Big Dog's corporate culture is very hard and delicate work—the failure rate is high. Still, the practice makes sense if you are willing to work patiently with such acquired companies.
Before blogging became all the rage, Tom was posting book reviews and Observations (essentially early blog posts) to this site. You can find the archives below.
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