What Happens to Technology in an Acquisition?

5 min read · Van Murray

The letter of intent is signed. The deal closes. Everyone celebrates. And then, usually within about three weeks, the technology problems start.

I've been through this eleven times. Here's what actually happens.

The first thing that breaks is communication.

Not the technology — the communication about the technology. The acquired company's IT team is suddenly reporting to new leadership. Their counterparts at the acquirer have their own priorities and their own systems. Nobody has been explicitly assigned to manage the integration. The org chart changed but the actual work — keeping both businesses running while you figure out the combined model — is happening in a vacuum.

Integration doesn't fail because the technology is incompatible. It fails because nobody owns it.

Vendor contracts become a problem immediately.

Change-of-control clauses are real. But even when contracts survive the close, the administrative work of transferring billing relationships, updating contacts, and getting the right people credentialed in the right systems takes longer than anyone budgets. In the meantime, you have two organizations running duplicate tools, paying for duplicate licenses, and neither side has a complete picture of what the other is spending.

I've seen post-close IT spend increase 40% in the first 90 days just from duplication and renegotiation timing. That's money that comes out of someone's budget.

The IT teams struggle with the dynamics more than the technology.

When an acquisition happens, the acquired company's IT staff knows they're in an ambiguous position. Are they being absorbed? Redundant? Their institutional knowledge is critical — they know where everything is buried. But they're also looking for their own next steps. The first 90 days determine whether that knowledge transfers or walks out the door.

The most important thing an acquirer can do in the first 30 days is be clear with the IT team about what the integration plan actually is. Not what you hope it will be — what it is. People make decisions based on what they know. If they don't know, they assume the worst.

What doesn't get planned for: the integration work itself.

Every integration I've been through underestimated the actual labor of consolidating systems. Email migrations, identity consolidation, network connectivity between sites, ERP reconciliation — each of these is a project. They don't run themselves. Someone has to own them, staff them, and track them.

The companies that get this right are the ones that have an integration project plan in place before close. Not a high-level roadmap. An actual plan: what systems are being consolidated, in what order, with what resources, by what date.

The companies that struggle are the ones that treat IT integration as something that will "figure itself out" once the business teams are aligned.

It won't. It needs a plan and it needs an owner.

If you're on the buyer side of a pending transaction and you don't have an IT integration lead identified, that's the first gap to close.

Navigating a transaction?

Aeolus has been on both sides of this conversation 11 times. Let's talk about where you are.

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IT Due Diligence in M&A: What Acquirers Miss → How to Prepare Your IT Infrastructure Before You Go to Market →