Keeping the acquisition pace without proper integration

Implications: Symantec, like so many fast moving technology companies, is hungry for growth.  To keep the top line moving up while the cash balance is plentiful, more companies are turning to acquiring competitive and/or complementary companies.  With over 80% of all acquisitions failing, its a wonder why these acquiring companies don't properly plan out their integration process better.

Analysis: It's widely assumed that the acquisition of Veritas by Symantec was a large purchase, and an even large task of integrating the business and employees into SYMC's fold.  So why did the company announce on Monday that it was purchasing Altiris for $830M?

Most technology companies that go on the acquisition hunt do so by purchasing smaller companies whose products or client list complement the acquirer's portfolio.  Pricing is reasonable, synergies can be realized, and integration processes are fairly simple.  (It's much easier to integrate a 50 employee company using simple accounting systems than a 1,000 employee company using a large, competitive system.)  On the occasion a large acquisition is made, the integration strategy must be completely detailed and time taken to correctly integrate the two companies.  When this does not happen, many different consequences could arise- sloppy accounting, poor system integration, lost clients, missed market opportunities, forgotten/discontinued product development, to name a few.

While it appears SYMC's pricing has come down to earth a bit, from 10X forward revenue to 3.5X, their pace for big acquisitions has not.  By taking on another large purchase before completely integrating the last, Symantec is risking significant opportunity loss with Veritas (and possible throwing away cash).  It will be interesting to watch Symantec's future acquisition strategy unfold.  Even after a second helping at Thanksgiving dinner, you need to push away from the table before making a turkey sandwich.