An Acquisition Plan Primer

In 2018, Microsoft acquired GitHub, a popular code-repository service used by many developers and large companies, for $7.5 billion in stock. The deal heightened Microsoft’s focus on open-source development, aiming to increase enterprise use of GitHub while bringing Microsoft’s developer tools and services to new audiences. By joining forces with GitHub, Microsoft CEO Satya Nadella said, “we strengthen our commitment to developer freedom, openness and innovation.”

This acquisition had many strategic wins—Microsoft expanded its presence in the open-source community, attracting developers and positioning itself in a supportive role in the software development ecosystem. However, it also faced challenges, such as skepticism from the developer community and concerns about its historical attitude towards open-source platforms. However, the long-term success of this acquisition wasn’t just luck; it was the result of a carefully crafted Acquisition Strategy Plan that anticipated risks and outlined strategic goals.

If you’ve never written an Acquisition Strategy Plan before, this primer is for you. Acquisition Strategy Plans help guide organizations through the acquisition process, ensuring a well-defined approach that aligns with strategic goals.

This article will cover the purpose of an Acquisition Strategy Plan, the different kinds of plans, who’s involved in the writing process, and some of the challenges you may face while crafting the document.

What is an Acquisition Strategy Plan?

An Acquisition Strategy Plan outlines your approach for evaluating and executing an acquisition. It includes strategic objectives, risks, expected benefits, and detailed action plans. It should provide clarity, facilitate informed decision-making, and ensure it aligns with your strategic goals.

Acquisition Plan spreadsheet

Types of Acquisition Strategy Plans

Acquisition Strategy Plans can vary depending on the complexity and scope of the acquisition. Examples include plans for mergers and acquisitions (M&A), joint ventures, and even smaller asset acquisitions. Regardless of type, these plans serve as a roadmap to help stakeholders make critical decisions with confidence.

Who Benefits from an Acquisition Strategy Plan?

An Acquisition Strategy Plan is beneficial for multiple teams and stakeholders across an organization. Here’s a breakdown of how different groups use this plan:

1. Management Team:

Provides a structured framework to evaluate the acquisition.
Ensures that acquisition decisions align with the company’s strategic objectives.

2. Board of Directors:

Communicates the rationale, risks, and potential benefits of the acquisition.
Aids in the review and approval processes.

3. M&A Teams:

Outlines strategies, milestones, and responsibilities throughout the acquisition process.
Acts as a roadmap to guide activities, ensuring a well-structured and organized approach.

4. Legal and Compliance Teams:

Ensures all legal aspects of the acquisition are addressed and managed effectively.
Serves as a reference for due diligence, contract review, and regulatory compliance.

5. Finance Teams:

Assists in analyzing the financial aspects, including valuations and financial statement impact.
Helps integrate financial considerations into the overall strategy.

6. Human Resources (HR):

Plans for workforce integration, talent retention, and cultural alignment.
Provides a structured approach to addressing human resources-related aspects effectively.

7. Communication and Public Relations Teams:

Develops internal and external communication plans.
Ensures stakeholders are consistently informed and engaged, fostering transparency and trust.

8. Risk Management Specialists:

Structures risk assessment and mitigation strategies.
Helps identify and address potential risks associated with the acquisition comprehensively.

9. IT Teams:

Plans the integration of technology systems, data migration, and IT infrastructure changes.
Offers a systematic approach to managing technological aspects of the acquisition.

10. Market Research and Strategy Teams:

Incorporates market analysis and competitive intelligence into the acquisition strategy.
Ensures that the acquisition aligns with the market environment and strategic positioning.

11. External Advisors:

Facilitates collaboration with the organization’s teams.
Aligns their expertise with the overall acquisition strategy by referencing the plan.

Acquisition Process Timeline

Challenges in Developing an Acquisition Strategy Plan

Creating an Acquisition Strategy Plan can be challenging due to several factors:

Cross-functional Alignment: Ensuring that all departments involved—such as finance, HR, IT, and legal—are aligned in their goals and timelines.
Data Integration: Gathering accurate data for analysis and ensuring consistency in financial and market research.
Balancing Timelines: Managing deadlines while ensuring due diligence is conducted thoroughly.

Addressing these challenges early in the process can contribute to a more effective and comprehensive strategy plan.

Practical Tips for Writing an Acquisition Strategy Plan

Start with a Clear Objective: Define the strategic purpose behind the acquisition and what the organization aims to achieve.
Engage Key Stakeholders Early: Involve all relevant teams, from finance to HR, from the outset to ensure comprehensive coverage of all aspects.
Use Action-Oriented Language: Make sure that every section of the plan clearly specifies actions, responsibilities, and timelines.

Spreadsheet Data for Acquisition Process

The acquisition process involves multiple stages, each requiring careful planning and execution. The diagram below outlines the capital funding that may be required in the acquisition strategy.

Capital Funding spreadsheet

Checklist for Your Acquisition Strategy Plan

[ ] Define Strategic Objectives: Clearly articulate what you hope to achieve with the acquisition.
[ ] Risk Assessment: Identify key risks and mitigation strategies.
[ ] Stakeholder Engagement: List out all stakeholders and their roles.
[ ] Financial Analysis: Include valuations, funding requirements, and potential financial impact.
[ ] Communication Plan: Develop internal and external communication strategies.
[ ] Integration Planning: Address HR, IT, and operational integration.

Conclusion

The benefit of writing a well-structured Acquisition Strategy Plan is that it ensures your acquisitions are strategically sound, well-planned, and properly executed. Make sure to involve all relevant teams and address each component systematically, in order to create a roadmap that guides your company through the acquisition process.

Ready to start your Acquisition Strategy Plan?

Download this MS Word template. It has detailed writing guidelines and sample text to get you started.