Two sides of a company acquisition

Business Reporter talks to the founder of a digital product agency and the president of the company that recently acquired it to explore both sides of the acquisition process

 

Bruno Guicardi, Co-founder and President at CI&T

How did you find starting an acquisition process during the pandemic?

“The key to success was staying laser focused on what we wanted from the acquisition. This meant ensuring we shared the same company values and love for the work we do. Culture is of the utmost importance to us, so it was crucial to assess how the two company cultures overlapped, rather than how they differed.

 

“As long as there is enough common ground, things can be sorted out – and we quickly realised that Somo shared the same culture of innovation, people-centricity, and passion for making things happen. This made it the perfect fit.”

 

How important was it to convey your culture and how hard was it doing this digitally?

“We knew having similar cultures would be vital to a successful acquisition. We pride ourselves on having a culture of innovation, where thinkers can thrive and excel at every level of the company. This is how we empower our employees on the ground and in our work with clients, so conveying this from the offset was crucial.

 

“To bring both teams together we began with a series of interactive, online workshops where we could discuss the nature of our client engagement and the type of work we do. This was initially for our EMEA team who would be working most closely with Somo in the UK, however we gradually introduced more colleagues from around the world based on project needs. This meant when we all finally met in person, everyone felt comfortable, knowledgeable on each other’s roles, and able to hit the ground running.”

 

How did you make your side of the process work effectively?

“Continuity is key. We approached the process of integration gradually, in small and concentrated pockets which would minimise disruption as much as possible. Every function was to experience change at some point, whether it was different workstreams, brand integration, sales, or administration. But we didn’t want to risk overwhelming employees by making this happen all at once. Instead, we prioritised the basics, like financial reporting – must-haves which gave us the autonomy to keep things ticking over nicely while the integration process happened.

 

“We were also careful to keep continuity within teams. Even if on paper it might have made more business sense to assign a CI&T leader to a Somo team and vice versa, trust in team leaders is crucial and we wanted to respect that. We didn’t want to break up existing relationships and impose change, which can often lead to real disruption. Therefore it was important for leaders to first earn this trust, by working side by side on new projects.”

 

What were the benefits of the deal taking place under these challenging circumstances?

“Working online for the most part, it was actually far easier to arrange meetings with relevant stakeholders. The build up to an M&A can often be very lengthy, especially the decision process behind buying and selling, and then the beginning of negotiations. Being able to jump on calls quickly because we were all remote helped to speed up this side of the process.”

 

How is business now with Somo part of the CI&T family?

“We’re thrilled that Somo is now part of the CI&T family. There’s huge demand for digital transformation services, which is the fastest growing segment in IT services right now. And we’re one of the fastest growing companies for this, seeing two-thirds growth (66%) in net revenue in our first quarter compared to last year. This was only possible by growing organically, and through the acquisition we’ve been privileged to welcome around 300 hugely talented digital specialists from around the world, who have deep expertise in digital products.

 

“Somo-ers bring with them great knowledge and add expertise especially in auto and utilities – segments we didn’t have as much exposure to before. The acquisition has also allowed us to further diversify our geographic footprint and talent pool.

 

“It’s only the beginning of our journey together– we’re on track to become fully integrated by the end of this year, and we’re hugely excited for what’s to come.”

 

Carl Uminski, Co-founder and CEO at Somo

How did you find starting an acquisition process during the pandemic?

“The pandemic was well underway when the takeover of Somo by CI&T took root. 

 

“Remember, this was a time of no flights  and no face-to-face connections. But, as a business, we were thriving. Somo’s digital DNA meant we were well adapted - amidst the uncertainty our revenues continued to rise and we won twelve new clients, retained global talent, as well as achieving numerous industry accolades.

 

“We were on the right track - and CI&T could see this.  And although it was harder to foster personal connections during the pandemic, it was much easier to book meetings online meaning we could spend time with more of the CI&T team. A few years prior, a deal like this would have needed huge amounts of investments in travel - but suddenly, all we needed was a Zoom link.”

 

How important was it to convey your culture and how hard was it doing this digitally?

“One of the biggest challenges with any acquisition, especially in a people-led business, is conveying the culture and ensuring the cultural direction is aligned. We knew early on that we had shared beliefs and values in how we treat our people and in how we create great workplace environments. 

 

“Winning clients and building great digital products can only get you so close. An acquisition requires intimacy on a new level. You need to sense who people are in-person - and how they conduct themselves in physical environments. 

 

“Solange Sobral, EVP Partner of Operations at CI&T, was instrumental here. She has spent 26 years at CI&T and recently relocated to London. During the early days we could connect with her in person which made a massive difference. Once restrictions for flights were lifted, Bruno Guicardi, was able to travel to London. We then had further good conversations, learning more about each other and becoming excited about the potential for growth together. 

 

“What really resonated with us is seeing how Bruno and the team at CI&T know what they don’t know - and this is really powerful when looking for partners to work with. We know the power of people who are confident in what they know - but comfortable in what they do not. You can’t underestimate the power of people - and this was where the cultural fit cemented.”

 

How did you make your side of the process work effectively?

“We all quickly became good at acknowledging the differences in language, terminology and jargon each company uses and the importance in explaining exactly what we meant. This was a key part of the process to ensure we all understood each other.  Make no mistake, these deals are complex. There are hundreds of documents with many versions, worked on by our people, their people, lawyers, and consultants. 

 

“Getting everyone in the same room was impossible - but getting everyone on the same page proved easier than we expected. Technology was key in keeping us connected - but it wasn’t as good at conveying the human side of the deal. Understanding and overcoming the social hurdles could only happen by meeting in person- and when we finally could, it was the last piece of the puzzle in place after many months of hard work.”

 

What were the benefits of the deal taking place under these challenging circumstances?

“There are so many elements that need to progress seamlessly in parallel. 

 

“In the old days, this would result in a lot of stressed-out sessions in the boardroom. You’d be uncomfortable and unhappy - and your people would likely notice it, too. 

 

“Working from home solved a lot of this and really eased the pressure whilst we managed the acquisition process remotely. You can finish late - but you close your laptop, and you are quickly with your family rather than needing to embark on a late-night commute home. These little things really helped.

 

“The pre-pandemic stigma which surrounded WFH has been shattered. And not a moment too soon.”

 

How is business now with Somo part of the CI&T family?

“The structure of the deal we put in place, combined with our shared attitudes and desires, means the acquisition has been smooth sailing so far. 

 

“Collectively, we have a lot of experience in this field and therefore we’ve spent the time discussing and planning how to get this right first-time. Rather than saying ‘this is how we are going to make this great…’ our attitude was always, ‘what could make this fail?’.

 

“We knew it was important to have as little business disruption as possible which will translate into growth, sooner. 

 

“We decided to remove as much corporate baggage as we could - and put a simple focus on our staff and our clients. And now we are putting those words into action. 

 

“Within just four weeks of the deal taking place, we’d created a joint seven-figure sum of business. This was a brilliant feeling - but we aren’t getting carried away. We will take our time. We will talk, learn and laugh together. We’ve turned our army of 300 into a legion of 6000 - and with this increased power we have a foundation ready to drive exceptional growth across the USA and EMEA.”

 

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Somo is one of the UK’s leading and multi-award winning digital product agencies. CI&T is a digital consultancy headquartered in Brazil and acquired Somo in January 2022. Both companies work with global brands including Johnson & Johnson, Carrefour, Google, Audi and E.ON.

 

Main image courtesy of iStockPhoto.com