My Firm’s Acquisition Smottcell Security Systems (SS Sys.) consist of a large team of certified electronic technicians and integrators that design dependable communications, security and safety solutions for the market; they are leading the industry in the United States. Much of the company’s success is due to their outstanding marketing team and shareholders stock. They have a variety of systems used for communications, access controls, surveillance and are being used by schools and universities, government agencies, correctional facilities, and many commercial environments throughout the continental United States. They are ready to expand globally and are strategizing for their best entry mode. Identify Thumbprint Systems (ITP Sys.) is a midsize firm headquartered in India, that has only been around for approximately ten years. However, they were very successful throughout India and Japan for the first few years. They are the manufacturers of an arm bracelet and receiver system that combines electronics with fiber optics technology to track real time data, once a recognizable thumbprint signal has been received within a certain range. ITP Sys. does not manufacture any other products; however, they have made different models of this product.
Although, this is still a hot commodity for financial institutions and correctional facilities; the interest from the other sectors has declined, and so has the value of the company’s stock. The CEO of SS Systems is aware that seventy five percent of all acquisitions fail, but know he must proceed.
There were hubristic motives by the manager of Scottcell Systems. According to Peng (2011), hubris is defined as “an over confidence in one’s capabilities” (p.331). In laymen terms it is a form of cockiness and denotes arrogance. Hubristic motives could result in Smottcell’s managers naively overpaying, especially, if there are multiple firms making bids on ITP systems. This is risky, especially for the shareholders of Smottcell’s.