Insider reveals: With these tricks Apple buys small companies

Apple buys smaller companies from time to time, and we generally do not discuss our purpose or plans. “

A sentence that resides in Apple’s PR department on key “Z”. “Z” like acquisitions. Every time Apple buys a smaller business, that phrase is the official statement. Always the same sentence. Year in, year out.

A phrase that of course fits Apple’s legendary secrecy policy. Since its founding, the company has been reluctant to look in the charts.

The more exciting the question of how it actually runs exactly when Apple buys a company. Not that Apple would get into this topic unscheduled chatting now. It must therefore already happen in the rare case that a “bought-up” company boss – years later – suddenly tells how it was when Apple took over his company. Years later, because of course, no start-up boss wants to risk that a lucrative takeover deal with the big Apple company in the end still burst because it was chatted too early.

Only six years later, the former boss of the card software Embark now provides insights into the exciting takeover procedure. Such a takeover is not a walk. On the contrary!

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For the first time, a detailed look at the way in which Apple initiates acquisitions, unwinds and possibly even refrains at the end.

Notes Post It
Apple’s master plan for acquisitions requires extensive preparatory work (photo: pixabay.com)

David Hodge co-founded the card and navigation solution Embark. In an interview with William Gallagher of AppleInsider and in several tweets, he now outlines under what circumstances Embark was finally sold to Apple in 2013. Better: but still was sold …

Out of the blue, Hodge initially received an invitation to Cupertino. One wants to talk to him about an interface extension in the Apple Maps. But it was not about an API extension, that was only advanced according to Hodge. Once in Cupertino, Apple Hodge opened the real reason for his visit: Apple wants to buy Embark.

Sounds good, but is only the beginning of a sometimes endless story.

Hodge recalls that with his up-and-coming but ingenuous company, he faced an armada of Apple experts and lawyers. So what do you do? Hodge was clear: he had to seek his own legal and business advice. Quickly, the cost totaled nearly $ 200,000. Advance payments on own account, just for that. And at that moment, it was still unclear that the takeover was really going on stage.

“This is a hell of a process that may bankrupt your company if the negotiations fail.”

In addition, it was difficult for Hodge to talk with confidants about the possible deal with Apple. Because Apple insisted on strict secrecy: Hodge was suggested at the beginning of the talks, he recalls that he should not inaugurate family or friends in the ongoing negotiations. Then the first shock moment:

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The idea for new business plans is already maturing in the (unfinished) negotiations – Photo: pixabay.com

While Hodge may secretly figure out what the acquisition will bring him financially, he suddenly falls from the clouds. He hears in the news that Apple is said to have adopted HopStop, Embark’s biggest competitor. Obviously a clever move from Apple. Because Apple broke the negotiations with Hodge or Embark still not off. Now it was Hodge’s turn. He probably had to provide arguments that an Embark acquisition for Apple under these circumstances still made sense.

Embark plunged into work. He continued to work on his app, adding more features and delivering an update that integrates passenger transport in the San Francisco area where Apple is based. Pluses collected at Apple!

In late summer, Apple then drummed all parties together for a big round in Cupertino. Again hope. But Hodge’s nerves were strained shortly thereafter. Call from Apple – it lacks the signature of an important Embark investor, without which Embark can not sign the agreement with Apple.

The lawyers clarified the matter among themselves. Then Hodge could drive via Uber but to 1 Infinite Loop, the former headquarters of the Apple headquarters.

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Hodge’s ID card at Apple (Photo: twitter / David Hodge)

But although the ink was dry, Hodge and his team continued to be condemned to strict secrecy. Hodge and his co-founder quietly celebrated the business at home, but not publicly. If someone asks him about the deal, let Hodge, according to Apple’s request, answer: “We work at Apple.” Not more, not less.

Hodge remembers that the whole procedure had pushed his psyche, in the end he had cracked his teeth extremely and had chronic jaw pain – and lots of problems with his own family.

Only weeks later, Apple even then announced the acquisition. How much Apple has paid for Embark and how rich Hodge and his comrades have become: under the covers! An NDA just. Til today.

Such a deal, including the NDA, can not be found in many smaller companies that have once gambled with Apple for a takeover. In the last few years, some startup founders have at least claimed that Apple has only had pro forma acquisition negotiations with them. Rather, Apple had in the talks a lot about the company, their business models and ideas sounded, but allegedly never had a serious buying interest in Cupertino.

In that sense David Hodge was lucky. He really sold his company to Apple. He does not grind his teeth anymore. And he left the company again in 2016. The mission with Embark to improve Apple’s cards was done.

Just Apple has again taken over with iKinema a small company that manufactures VR products. Prior to that, the company has purchased laser-based machine-learning start-up, AR start-up Aconia Holographics, or Autonomous Drive AI start-up. One can be sure that Apple has felt every little company before the signatures back to the tooth …

More on the subject: Apple: What’s still to come in 2019 – and what awaits us in 2020

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