Everyone is doing acquisitions these days. Some companies actually say to senior executives “To achieve this portion of your bonus you must close x number of transactions by year end”. This is silly beyond words. At the very least it fuels the tendency to overpay and is bound to result in some poorly thought-out deals. In many cases the author of an acquisition doesn’t have to live with the consequences. The average corporate executive is in any position for four or five years, often less, and will most likely not to have to endure the bad consequences of any acquisition made towards the end of his or her tenure. Urging a person in this position to make an acquisition is like a parent urging marriage on his heir, “oh, and by the way, you can move on after a few years and someone else will have to make the relationship work”. Many of us have had to try to make bad deals work after the fact, usually fruitlessly, and one can think bitter thoughts about the architects of these deals, who typically basking at that time in the success of other peoples’ wisdom in their new positions.
