Growth through acquisition isn’t just for the big companies

It is not unusual to hear of a conglomerate acquiring another company to achieve market share or to help it branch into a new field. However, the trend does not just involve mega companies.

Growth through acquisition is a valid strategy for businesses in the lower mid-market as well as the mid-market. Like their larger peers, smaller entities are reaching out to acquire other businesses to achieve growth, to find new talent, to get into new markets.

Members of the BTS team have been working with several companies in recent months to help them identify a target for acquisition.

There are several phases for most projects of this type.

Defining and clarifying the goals. The advisor works with the owner and management team to clarify what is sought and why.

Identifying potential targets. Sometimes the buyer has companies in mind, but generally the best prospects are found during a confidential search.

Finding the synergies. The acquisition has to make sense, and relate directly to the strategy that has been developed during the early stages.

Framing the deal. An acquisition will require a formal offer to purchase, completion of diligence and development of an integration plan, which should be done before the formal agreement is signed.

Regardless of size, growth through acquisition is becoming a more common approach for smaller entities to remain competitive and to develop a stronger market presence.

What our clients are saying...

“New Image Coatings, owners of Seal-Once, retained Business Transition Strategies in April of 2015 to locate a strategic buyer for the company. This was successfully completed during April of 2016 when we were acquired by UC Coatings of Buffalo, New York. Working at our side throughout this process were John Howe director, and Ken Schaefer, deputy director, of Business Transition Strategies. From the start of the project, where the information memorandum was developed, to helping us create the management presentation to acquirers, through negotiating the letter of intent and then the definitive agreement, they were there with me and our professional team every step of the way. It took nearly one year to the day to complete the project, but they never lost focus on my best interests and helped me keep my eye on business. This sale was very complex. It included transfer of trade secrets from the product developer, …as well as the transfer of a manufacturing and licensing agreement we had with the core compound producer… John and Ken marketed the company to a range of strategic acquirers, including a number of private equity groups and their platform companies, which ultimately resulted in an agreement with United Coatings… BTS’s level of expertise in the process and close attention to detail enabled us to successfully navigate the deal. I would recommend John Howe and Ken Schaefer to any company owner considering selling.”

- Hank Croteau

New Image Coatings