Bosses ‘are deluded’ over success of deals

An interesting title for this story I read in the Times this morning. The acquisition of my current employer (Aspen Systems) by Lockheed-Martin falls right in the area the story discusses (acquisitions of $100 million or more). The buyout is scheduled to close shortly, so I expect to find out soon enough what Lockheed’s plans are for us.

The idea of M & A activity not always creating additional value has been around for awhile. I remember reading stories like this in magazines like The Economist five or six years ago in the middle of the Internet bubble. I’ve only been working full-time for nine years or so, but I’m sure questioning the value of mergers stretches back far before my time.

Since news of the buyout came to us, I’ve been wondering what Lockheed sees in Aspen that they want. Our annual revenue is a tiny fraction of Lockheed’s. As far as I can tell, the thing about Aspen that Lockheed most wanted was the subject-matter expertise. A lot of the civilian agencies we do work for have essentially outsourced certain government offices to Aspen so we can act on their behalf. So while we aren’t an outsourcing power like IBM or EDS, we do occupy a similar niche.

I think Aspen gets plenty out of being bought Lockheed. The first thing is deep pockets. Even more important than the deep pockets is superior processes. We just achieved CMMI level 2 last month, while parts of Lockheed have been at levels 3 through 5 for years. Only time will tell if we help push the LMT stock symbol up.