So you wanna buy a startup? But how do you get the deal signed and roll their team into yours? Consulting behemoth Ernst & Young wants to have the answers and rule M&A advisory services in Silicon Valley. So today it acqhired Tasman Consulting, Bay Area specialists in integrating acqhires and acquisitions into their new parent companies.
Tasman’s founders Niki Lee and Shari Yocum will now be Principals in EY’s People Advisory Services squad, and most of their 10-person team will come with them. They’ve worked on tons of Silicon Valley deals since launching in 2011 with Salesforce, eBay, Lenovo, Autodesk, American Express, VMWare, and more. Tasman also won the 2015 M&A Service Of The Year award from M&A Advisors.
EY was the 11th largest privately owned U.S. company as of 2015 with 212,000 employees. It’s one of the “Big 4” audit firms that provides professional tax and consulting services, alongside PricewaterhouseCoopers, Deloitte, and KPMG.
Yocum tells me “Ernst & Young is really serious about being a big piece of M&A in the valley.” Despite a chilly IPO market and trouble for unicorns, overall tech exits were up 21% in 2015 due to increased M&A, according to CB Insights.
But startup founders tell me the biggest problem with M&A is figuring out how to combine the teams to avoid a political infighting, overlap leading to misused resources, and deterioration of company culture. “They need to find a way to make the acquisition successful and execute on an overall integration plan” Yocum says. Lee calls this “HR transformation.”
If not orchestrated well, the best employees can slip out of their golden handcuffs, and the deals can become wastes of money. Yocum tells me “What we focus on is helping larger companies retain the technical talent and leadership talent when they come on board.”
Tech giants are realizing that they can’t build everything themselves, and even if they could, it’s tough to build community for products when you’re known for something else. Acquisitions can be the answer to staying fresh and relevant, but can require nimble management to allow as much independence as possible while still taking advantage of the parent company’s resources.
Successful purchases like Facebook’s buy of Instagram, where it kept the product separate but lent engineering, recruiting, anti-spam, internationalization, and advertising muscle, have re-proven the potential of M&A. And with these billion dollar deals come lucrative fees for services like EY that advise acquirers.
Now the international consulting titan has some hometown heroes to get them into the best buyouts.