Why PE Firms Must Factor Go-to-Market into Add-On Acquisitions
The private equity world is gearing up for another cycle of acquisitions. With interest rates expected to come down and pent-up demand driving deal activity, firms are preparing for an increase in M&A.
But if history tells us anything, it’s that most PE-backed companies fail to maximize value from their acquisitions. Why? Because the cost of Go-to-Market (GTM) integration is overlooked. They plan for financial, operational, and technology integrations but treat sales and marketing as an afterthought.
That’s a mistake.
If you wait later in the hold period to fix GTM issues, you’ll lose valuable momentum. The time to think about integration isn’t post-close—it’s before you sign the deal.
The Golden Question: Are You Making Competitors Nervous?
Here’s the simplest way to assess whether you’re executing acquisitions correctly:
A year from now, will your competitors feel the pressure from your acquisition? Or will they be relieved that you bought the company because you failed to capitalize on it?
The answer depends on whether you integrated your Go-to-Market function properly.
Many PE-backed firms purchase businesses based on financial synergies—cost-cutting, shared infrastructure, and eliminating redundant roles. But cost synergies don’t drive revenue growth. Revenue synergies do. And those come from a well-thought-out GTM plan.
Why Most Add-On Acquisitions Fail to Unlock Growth
PE firms assume their portfolio companies know how to integrate sales and marketing. That assumption is often wrong.
Before the slowdown of M&A, many mid-market companies had experienced teams dedicated to M&A integration. Sales ops teams knew how to combine CRM systems, marketing teams could align messaging, and revenue leaders had a playbook for cross-selling.
But after the past few years of limited acquisition activity, those integration capabilities have degraded. Experienced staff has either left, been reassigned, or lost their muscle memory for integrations. As deal activity increases, portfolio companies will find themselves unprepared.
Here’s what happens when GTM integration is ignored:
- Sales teams remain siloed and fail to cross-sell effectively.
- Overlapping products lead to internal conflict.
- Marketing teams struggle to position the combined offering.
- Pricing strategies remain inconsistent, confusing both customers and reps.
- The company loses the very momentum that made the acquisition attractive in the first place.
Getting Ahead of the Problem: What PE Firms Should Do
Don’t wait for issues to arise post-close. Proactively assess GTM integration before making an acquisition. Here are five key areas to evaluate:
Include GTM Integration Costs in Your Investment Thesis
PE firms budget for integration costs—ERP consolidation, legal fees, and operational restructuring. But GTM integration is rarely included in that budget.
If you’re investing large sums of money on an acquisition, you should allocate a percentage to GTM optimization. That means earmarking budget for:
- Sales and marketing team restructuring
- CRM and marketing tech stack alignment
- Go-to-Market enablement and training
- Demand generation acceleration
This approach de-risks your investment and drives faster growth. A well-executed GTM strategy accelerates revenue synergies and shortens the time-to-value for your acquisition.
The Role of PE in Driving GTM Execution
One of the biggest barriers to success is founders’ and existing leadership teams’ resistance to outside influence. They believe they can handle GTM integration internally.
PE firms must push their portfolio companies to think beyond basic integration and plan for revenue acceleration. That means asking the right questions upfront, ensuring there’s a GTM roadmap in place, and bringing in external expertise when needed.
Claim the Advantage of Integration Investment
As M&A activity increases, prepare to capitalize on the coming opportunities. Will your acquisitions be growth engines, or will they stall due to poor integration?
Claim the Advantage of Integration Investment
As M&A activity increases, prepare to capitalize on the coming opportunities. Will your acquisitions be growth engines, or will they stall due to poor integration?
The difference comes down to how well you integrate Go-to-Market. Get it right, and your competitors will be scrambling to keep up. Get it wrong, and they’ll be thanking you for taking a competitor off the market.
Make GTM integration a priority—because execution will make the difference.
If you’re planning an acquisition and want to ensure a winning GTM strategy, schedule a call with Cortado Group to explore how we can help you drive faster, stronger results.
