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APIs Could Make Or Break M&A Deals


The ‘true’ value within an enterprise is not its systems, assets, products or people, but its data.

The surge in deal making seen at the end of 2017 has continued through into 2018/19. Pressure from shareholders and the search for innovation continues to drive corporates towards M&A. Big tech companies are diversifying their offerings through M&A so traditional firms must react to newer, more innovative and disrupting firms. Global private equity activity remains buoyant. The preservation of deal value is of greater importance than ever, with tangible results often expected within the first 100 days post-deal.

M&A usually results in an already complex IT environment becoming even more complex, with that complexity increasing over time as companies become more comfortable with adoption of new data sources and cloud services.

Imagine this

The deal closes. Operational systems like HR, ERP, CRM are running with unified data from both companies. Updated information is being securely shared across the merged organisation, regardless of where it resides, or whether its about customers, prospects, payments or products. The customer experience is preserved and enhanced, and key business processes execute smoothly across the merged enterprise. MI/BI is plugged into the right data sources for pre- and post-merger reporting, allowing performance monitoring, synergy identification and better decision making. The new organisation is ready to leverage economies of scale and the benefits identified during pre-deal due dilligence.

Data access = smart decisions

If the newly merged enterprise can truly access its data, all sorts of intelligent decision-making becomes possible. These decisions directly impact operational efficiency and the core goals of the enterprise, irrespective of the industry it is in. In addition, access to enterprise data enables new ways of doing business that wasn’t possible before.

At Integrella we often recommend an API-led approach to enterprise customers sharing their data – whether internally, B2B or B2C. This is in direct contrast to the way industry leaders shared data internally and externally ten years ago.

Leaders in the field, like Netflix, Uber and AirBnB have changed the world with the way they share data. Laggards are focussing solely on portals, while leaders are look to smartphones and IoT. APIs have largely come about because of the rise of the smartphone.

In an M&A scenario, API-led change can directly impact deal-value preservation, with direct and tangible benefits to be realised in both pre-deal and post-deal scenarios, and for the enterprises on either the buyside or sellside.

On the pre-deal side – the use of an API to wrapper an asset makes it more attractive to a potential buyer as they can easily see how they can start getting value from the asset. For the vendor it allows them to more accurately value their asset and puts them in a better negotiating position. It would be powerful for a vendor to say to prospective buyers that they have a suite of APIs that allow the vendors to integrate their core finance and operational platforms with the assets simply and quickly. Implementing an API platform could be carried out by a vendor before they even approach the market. A cloud-native based approach would also allow for ease of migration of APIs across platforms as well as scaling to meet demand.

On the post-deal side – implementation of an API-centric approach to exposing enterprise data within the newly acquired asset allows for rapid integration of key functions. This allows a greater degree of confidence that deal value will be preserved. The approach furthermore sets the basis for iterative change that re-uses that platform as a base. Post-merger integrations typically have a key milestone of the first 90 days. Standing up an API platform in the cloud that exposes key data from enterprise platforms is something that can directly enable early benefits, followed by iterative frequent delivery of more APIs that deliver added capability. This speed is simply not possible with the large solution vendors’ products.

Looking even further ahead, an API based approach to smoothing deal execution can set the foundation for a step change within the new organisation for how it views and exposes it’s data. In essence while putting APIs at the heart of the transaction, they can continue to drive value for the enterprise long after the transaction lifecycle has concluded.

Companies can’t afford to miss out on the benefits of a robust API Strategy

APIs and API Management enable secure exposing of data – whether that data is consumed internally or externally. Security is fundamental when it comes to APIs, and using the right security frameworks to ensure secure access is essential. There are many technologies which can enable the right level of security around APIs. When assets are acquired, the buyers also take on an increased risk of a data breach by merging the IT estate from the asset with their current estate. Numerous cases have come to light where subsidiary companies have had weak security which has then been exploited by hackers to breach the parent company’s IT network, with devastating impact. Wrapping an asset’s IT estate with highly secure APIs allows the acquirer to feel better about taking on that additional security risk.

Many organisations don’t know how to design and run an API Strategy – At Integrella we’ve realised that organisations may know what APIs are, and have some familiarity with Swagger/OpenAPI3.0, REST. They may be familiar with integration frameworks such as Camel, as well as popular platform architecture choices that draw together elements of on premise and cloud based approaches. What they don’t know is how to bring it all together within a strategy that is clearly tied to business growth goals.

What Integrella brings to the party is knowledge of cloud-native technologies, open source technologies that work at scale, paired with the delivery leadership experience to knit these technologies together within the right delivery approaches – whether DevOps/Agile or waterfall. We’re familiar with the technologies available because we’ve researched those technologies to build a platform for ourselves and for our customers. We can deliver this for our customers with a clear view of the commercials as well as the delivery and operational risks.

About Integrella and APIs:

Every market has been disrupted by organisations that have taken innovative approaches to sharing data and using their data. Companies want to digitally transform, but most don’t realise that the biggest barrier they face is first recognising the value of their existing data and processes, and then making smart transformation choices to unlock that value.

Integrella has reviewed all of the modern API, integration and cloud-native technical building blocks and operating models that unlock the value of enterprise data through successful digital transformation, and found that there is no single product that does everything that is needed.

We assembled all of this knowledge into a Digital Integration Lab and a Digital Integration Platform to accelerate the journey to digital, reduce costs by rationalising IT operations and provide customers with limitless scale and innovation at speed.