M&A Trends - Comment

Lift outs, or the acquisition of entire teams of employees by one company from another, are increasingly prevalent. More businesses, including those in financial services and health care, are luring groups of talented individuals from competitors instead of acquiring or merging with companies.In fact, about 30% of analysts move in teams, says Boris Groysberg, assistant professor at Harvard Business School and co-author of "Lift Outs: How to Acquire a High Functioning Team," an article in the December, 2006, issue of the Harvard Business Review. In the article, Groysberg and co-author Robin Abrahams, a research associate at Harvard Business School, lay out the steps to a successful lift out. The article is the culmination of extensive interviews with leaders of lifted-out teams and work groups in multiple industries and countries, analysis of over 40 high-profile moves, research into best practices as reported by headhunters who facilitate these maneuvers, and two in-depth longitudinal case studies.Once taboo, lift outs are now a viable alternative for companies who want to avoid the headaches of a merger. "You don't want to buy the back office, you don't want to buy support people," says Groysberg. "Instead of buying the firm, you just acquire the team of individuals that has been working together a long time and works well." Lift outs have become more acceptable, in large part, because more U.S. employees are less loyal to the company that signs their paychecks and more aligned with their direct supervisors, Groysberg says.