LogMeIn has integrated 10 acquisitions and divested two business unit sales over the last five years. The company’s CIO shares his secrets on how to do it successfully.
As a CIO, working on the technology strategy of your company is a given. You oversee the technology operations, big investments in software or hardware infrastructure, and overarching plans to move to the cloud or develop an AI capability. But there’s another big job that can fall under your purview, too, depending on your CEO and board’s strategy — integrating acquisitions and separating the sale of business units.
Among his many other duties, this integration and separation has been a big focus for LogMeIn CIO Ian Pitt. He’s been with the IT tools and remote access platform company for about five years but in that time the company has done 10 acquisitions and two divestitures, most recently the sale of Bold360 to Genesys. LogMeIn acquired web chat company Bold360 in 2012. Today Bold360 offers capabilities including conversational AI and a dynamic knowledge base.
Pitt said that Bold360 was one of the earlier acquisitions for LogMeIn, and today Bold360 also includes the capabilities of another company acquired by LogMeIn about three years ago.
“We are often seen as a company of acquisitions,” Pitt told InformationWeek. Many of the products in the company’s portfolio are the result of acquisitions. LogMeIn has also done big rollups with its acquisitions. What’s more, in 2016, LogMeIn merged with Citrix’s GoTo business unit in a deal that Pitt said makes LogMeIn the company it is today.
You might expect that the CIO of a company like this has some expertise when it comes to integrating the IT systems of newly acquired and merged companies, and divesting the IT systems of newly sold or spun off companies. If you are a CIO or IT leader who is newer to this process, Pitt has some words of wisdom for you.
“It’s an IT project on steroids,” he said of doing acquisitions, divestitures and mergers. “It’s the largest IT project you’ve ever thought about but then multiply the complexity of that by 10.”
What makes these projects so complex?
“You have to think about technology and people,” he said. “We don’t have control over timing and that makes it more complex. When you buy and sell you are at the whim of the business, the selling company, the regulators, and an unknown time frame. We have a lot to consider, and we don’t have a lot of control over any element of it.”
The Citrix business combination was probably the biggest that Pitt has worked on, adding 1,800 people to the organization. In that kind of deal, the organizations make a decision about which company is bringing the best technology to the merged entity. During the process of buying the company the IT organization will examine why the purchase is being made, how the target company operates, how their production works, what are their core systems, and “is their solution better than something we typically have,” according to Pitt.
After so many acquisitions, Pitt and his IT organization have gotten pretty good at anticipating the speed bumps that it may encounter during these processes.
“There’s always something that gets missed in due diligence, given the speed of how we run,” Pitt said. Those could be taking into account a new region where LogMeIn hasn’t sold or operated before, or maybe a new industry segment. It could be how the acquired company prefers to run an office, or an industry regulation that LogMeIn hadn’t yet encountered.
On the flip side of that, divesting means that you have to move from a customer to a supplier mindset.
“Rather than defining how things will run, you are now subservient to the buyer’s acquisition process,” Pitt said. “You are handing over control.”
Among the tasks are making sure the remaining part of the company is secure and operational and carving out groups of users. These deals involve transient service agreements (TSAs) that define how the selling company will continue to run certain systems until all the systems and data and people can be transferred out.
“We now have to maintain integrity for our own organization and the third party,” Pitt said. “That becomes a burden on the team, but it helps us strengthen the operations as well.”
What’s the key to a successful separation?
“The art of getting a good divestiture is doing it as fast as possible,” Pitt said.
For any of these projects — whether you are merging, divesting, or acquiring, Pitt advises fellow CIOs to engage in their standard CIO behavior, which he defines as, “Communicate, communicate, communicate.”
Beyond that, consider creating an integration management office that focuses on the project. This office is built from across the organization pulling in engineers, salespeople, IP pros, finance, and HR. Pitt has designated people he sends to be a part of that team during such projects.
“Don’t do it as a side job,” Pitt said. “In some smaller acquisitions that may make sense, but an integration management office is a great model that we’ve used in the past.”
It’s important to get the integration of the companies right.
“During an acquisition we all have our day jobs to do as well, but a bad integration can sink both organizations.”
Jessica Davis is a Senior Editor at InformationWeek. She covers enterprise IT leadership, careers, artificial intelligence, data and analytics, and enterprise software. She has spent a career covering the intersection of business and technology. Follow her on twitter: … View Full Bio
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