Stratfield in Zwolle: Werken aan waarde voor aandeelhouders

Acquisition, a golden deal or a real headache?

Acquiring companies is an attractive and frequently applied growth strategy. Unfortunately, in practice, 70% to 90% of the acquisitions result in failure. But how do you make a success of an acquisition then? In this blog, we will give you some practical tips about this.

In order to determine how you should conduct a successful acquisition, you should first of all make an analysis of why so many acquisitions fail. This has a lot to do with the fact that companies generally look at the profit to be gained in a one-sided manner. A higher market share, for example. Or the recruitment of specialists and even competition. There is often less focus on what the acquiring organisation can add in the way of value to the target company. And that is often exactly where success lies. By ‘providing’, you can make a difference between a golden deal or a real headache. This provision can be done in various ways.

Make growth capital available

Making growth capital available is the most tangible and measurable form of appreciation. The acquired company can use this capital for process optimisation or innovation, for example. It is very important that you have a thorough understanding of the company you wish to acquire and the market in which it operates. With this knowledge you can ensure that the growth capital is being well spent. Growth capital doesn’t necessarily have to come from your own funds. Private equity funds also provide capital, obviously in return for the necessary yield requirements.

Ensure that there is a clear ambition

Another way to add value to a target company is by ensuring that you formulate a clear and feasible ambition. Because which way do you want to go with the company? What process policy is needed for this? And why are these changes necessary? The more employees are able to identify with this ambition, the more committed they will be in achieving it.

Transfer one or more important competencies

It can also be very worthwhile to transfer specific competencies to the acquired company. The acquisition of TDC, EME-Engel and Tricas by the ITMGroup is a good example of this. After the takeover, these companies consolidated their knowledge and opportunities to become a world leader in the soap and detergent industry. This enabled a small player like EME-Engel to become a valuable supplier to multinationals in the soap and detergent industry. TDC added packaging technology to this. Tricas was brought in to develop new, better and safer capsules that dissolve in water. The ITMGroup brought in technology and knowledge from the tobacco industry, except it was now for a totally different sector. By consolidating knowledge and capacity, the ITMGroup became the first ready-made supplier in this industry.

Share one or more important production resources

A fourth way in which to add value is by sharing one or more of your production resources with the company that you acquire. Here is another example. Following the acquisition of delivery network De Buren, bpost shared important production resources. In this way, De Buren was able to grow quickly with unmanned pickup points in Belgium. If these production resources hadn’t been shared, this would have taken far more time.

Do you need professional support?

A professional and experienced party with experience in the field of acquisitions can offer many tips and advice about making the golden deal. Are you looking for a company to acquire? Or are you perhaps on the point of selling your company? Get in touch and let us know how we can help you. You can find our contact details here.