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.