Companies will also likely pay more for organizations with top-notch IT systems than they will for organization's whose systems are in disarray, says Berez. "Sophisticated acquirers revise their price based on how difficult it's going to be [to integrate IT systems]," he says. "So a company that has a mess in their IT systems and can't clearly describe what's supporting their business is going to get a lower price."
Even when your company is the acquirer, the flexibility and maturity of your own IT systems still matters, too. In one example, Berez says that one acquirer didn't fully understand the complexity of the acquiree's back-office systems and the massive problems that were likely to surface as a result when it came time to integrate-in part because IT hadn't been involved in any of the preliminary discussions.
Consequently, Berez adds, the acquiree will wind up spending nearly two extra years and millions of "wasted" money to upgrade and migrate both systems to a new platform.
"The moral of the story is: Know thyself, first, and what your own capabilities are as an acquirer, says Berez. "And second, make sure you involve IT when considering deals, even in screening. You might decide not to do the deal once you see the true cost of [a potential acquisition]."
And not doing the deal might end up being the best business decision.
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