Dan Abbate is a Contributor on the Price of Business on Business Talk 1110 AM KTEK on Bloomberg’s home in Houston (learn more about Dan at www.robotaton.com).
Dan recently interviewed Aaron Skonnard, CEO of Pluralsight, and a leader in online training for technology and creative professionals. Aaron co-founded Pluralsight in 2004 with a small team of internationally renowned software developers with one goal: to provide professional tech training to people around the globe and change the way tech professionals learn. Prior to founding Pluralsight, Aaron earned his degree in computer science at Brigham Young University. After college, Aaron worked at 3M, Intel and Axiom Technologies, and also as a professional instructor at DevelopMentor, where he became passionate about teaching technology. Aaron was named Ernst &Young’s 2013 Entrepreneur of the Year Award for the Utah Region.
DAN: Hi Aaron! Thanks for taking the time to talk with us today. Can you tell me a little bit about your firm?
AARON: Founded in 2004, Pluralsight is the global leader in online learning for serious software developers, IT specialists and creative technologists. As the world’s largest curated e-learning library for professionals, the company offers instant access to more than 3,000 courses authored by top experts. With customers in more than 150 countries, Pluralsight serves as a career catalyst, delivering hands-on, practical training for the most in-demand and understaffed jobs of today.
Pluralsight is headquartered in Farmington, Utah, with offices in Chicago and Oklahoma City. The company has more than 80 employees and serves both individual technology professionals and companies large and small with its diverse catalog of online video tutorials. Pluralsight’s notable customers include Microsoft, Dell, Intel, Pixar, Electronic Arts, Allstate Insurance, General Mills and Merrill Lynch.
DAN: Today’s interview is all about Mergers and Acquisitions and lessons learned. Can you please tell me about a recent merger or acquisition that you and your firm participated in?
AARON: In April of this year, Pluralsight acquired Oklahoma City-based Digital-Tutors, a company that provides training in high-demand technical skills such as 3D graphics and animation to household names like Disney, Pixar and Electronic Arts. We acquired this company for $44 million in cash and stock and folded its employees into our company while allowing them to maintain appropriate autonomy and remain located in Oklahoma City instead of moving to our headquarters near Salt Lake City.
DAN: In your experience, what changes inside a company after a merger/acquisition?
AARON: If you’re not careful, the cultural foundations at the center of a company’s relevance and success can be compromised during a merger or acquisition. In our case, we were extremely deliberate about outlining which cultural imperatives couldn’t be compromised and looked for acquisition targets that would align well with our business strategy and philosophies. Once the acquisition was complete, we took great care to instill a shared vision with our new collective team while making strategic allowances for Digital-Tutors to maintain certain aspects of its unique identity.
DAN: Was there ever anything that surprised or shocked you after a business merger? What didn’t you expect?
AARON: We were expecting questions and uncertainty from employees on both sides of the deal, but it’s easy to underestimate the fear and trepidation that naturally accompany the words “merger” and “acquisition.” In completing four acquisitions over an eight-month period, we learned that addressing those fears openly and transparently is vital. The more candid communication you can offer employees, the better.
DAN: Do you have any best practices to share with other companies who are preparing for a Merger/Acquisition?
AARON: I have five main points of advice: (1) Repeat what works. Find the criteria that make your company successful and look for those traits in prospective M&A partners. (2) Expedite things. Align your internal and external stakeholders so the actual deal-making process can move quickly. (3) Focus on them. Put yourself in the shoes of the company you’re targeting and ask if its principals and employees will be happy with the deal. (4) Plan for where you want to be, not where you are. Look for deals that can provide something you need to get there. (5) Be deliberate about culture. M&A deals tend to devolve into numbers, but culture has to be top of mind for everything to work properly.
DAN: Thanks so much for taking the time to talk with me today, Aaron. I appreciate you sharing your experience and knowledge and I love hearing about interesting people and companies doing interesting things. Learn more about Aaron’s company at www.pluralsight.com.
Do you have an M&A story that you’d like to share? Tell me about it! Email me at dan (at) robotaton (dot) com.