New Data on ESOP Companies and Successful Acquisitions

Among the ESOP companies she studied through 30 executive interviews and survey research, researcher Suzanne Cromlish of Case Western Reserve University found that the ESOP companies tended to accelerate their acquisition activity following 2011. She also found that more than 95% of the reported acquisitions were successful, a stark contrast to the 20% to 50% success rate for acquisitions in general.

Cromlish also looked at the practices commonly used by ESOP companies making acquisitions and found a number of practices—"ethical values, shared visions, long-term orientations, altruistic behaviors, strategic planning, and organizational empowerment processes"—contributed to the success of those acquisitions. She points to some specific practices, such as open-book management, as keys to a successful acquisition. A summary of her findings to date has been posted on this site.