Is M&A Right for You?

Creating increased value when the market you are focussed on is tightening is getting much harder. Growing your share of a  tightening market  and therefor your top line revenues becomes even more important, but how do you do that without driving the price point of your product and services down?

Well there are many ways, you could focus on quality and becoming the premium brand, you will maintain a greater margin but not necessarily market share. You could also think about acquisitions to fuel that top line growth and your share of that tough and tight market.

Acquisitions are a risky area, identifying and acquiring a company is the easy part, post transaction integration is the hardest , however get it right and this can be a very lucrative and rapid way to create increased shareholder value in your company.

Over many years of advising clients and completing our own acquisitions, the commons key drivers we often experience for acquisitions are;

  1. Acquire to gain entry to a new customer segment to your current market
  2. Acquire to gain entry to new vertical and geographical markets
  3. Acquire to gain access and or control over scarce resources
  4. Acquire to plug a gap in your services and or products offering
  5. Acquire to reduce the level of completion and your hold in the market
  6. To bulk up your company ready for exit to a larger player

BUT STOP and think ,

  1. Can we do this ourselves without acquiring?
  2. How defensible and ageless  will the technology be that we are looking to acquire?
  3. Can we integrate the people, process, customers and culture in to ours?
  4. How are we going to fund the transaction
  5. What are the opportunity costs of the transaction
  6. Do we have the time and the people with the right skill set to perform due diligence and post transaction integration

The above drives and think moments far from exhaustive, however we trust this provokes some time to sit and think about how to grow your company.

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