Growth Through Acquisition in the Lower Mid-market
Growth through acquisition has been a strategy largely used by mid-sized and larger companies for years. Now firms in the lower mid-market are getting into it as well.
Under this strategy, a company buys another entity for reasons that include:
- building market share
- gaining access to a new market
- getting special skills or services offered by the target
- to get access to skilled personnel in an increasingly tight labor market
An acquisition can greatly compress an organic growth strategy which could take years and major strategic investments to accomplish.
We are seeing smaller companies in the region achieving scale more quickly with acquisitions, one of which is referenced in the second article in this newsletter where a N.H. company acquired part of a Maine entity for just this reason.
This process involves targeting competitors or related entities for acquisition. When another company is purchased and combined with the acquiring entity, the result is a larger, more dynamic business. The goal is to grow the top line, and then - through efficiencies, market expansion, greater customer reach – to grow the bottom line for the combined entity as well.
Owners engaging this strategy should have the long-term in mind. It may take months or years to fully achieve the potential value.
There is an added benefit to the new ownership: the company is larger and more likely to be of interest when the time comes for a sale.
Our team will work with owners and other advisors to plan out and initiate such a strategy.
BTS News
-
Growth Through Acquisition in the Lower Mid-market
Growth through acquisition has been a strategy largely used by mid-sized and larger companies for years. Now firms in the lower mid-market are getting into it as well.
-
PEI Cites 8 Attributes of Quality Deals
Quality deal flow is among the top concerns for M&A advisors. A recent blog posted by Private Equity Information offers 8 key attributes of “quality deals.”
-
In an M&A Program: Why Consider a Business “Carve Out”?
An M&A program need not be limited in the search to the complete acquisition of a company.
-
The BIA Report on Consumer Confidence
"NH consumer confidence remains high" according to the latest BIA Survey conducted October 10 and October 18, 2018 by the UNH Survey Center.
-
Business Transition Snippets
Here are a few observations we culled from sources we regularly review that relate to business transitions.
-
What to expect in the LOI exclusivity period
A question that often emerges when reviewing proposals for acquisition with owners is the exclusivity period.
-
Growth through acquisition isn't just for the big companies
Growth through acquisition Is a valid strategy for businesses in the lower mid-market as well as the mid-market.
-
The exit decision- timing and issues
When should a business owner start thinking about planning their exit? Early! This is a high-stakes decision and should not be first contemplated when it is imminent.
-
April PEG investments
It is interesting to watch trends in private equity investments. In general, they reflect confidence in the value of making things. Transactions give insights on the broader acquisition environment, p
-
M&A among top priorities of CEOs
CEOs in wide range of sectors are optimistic about the current business environment and significant segment listed mergers and acquisitions among their top priorities.
Case Studies
-
Precision Machining Company
Initially, liquidation was a serious consideration. It would offer a quick exit but would hurt loyal employees and disrupt the customers who had come to rely on its quality production.
-
Green Product Company
Our client owners could dig in for the long haul…However, this would take five years or more. Owners simply lacked the horsepower to do it.
-
Water Purification Company and Young Buyers
Owners decided they wanted to retire. They also wanted to be fair to the staff who had been loyal to them. Could the company be sold, the staff retained and the facility remain in use?
-
Magnetics Company with High Profile Customers
(T)he manufacturer would need to focus on growing EBITDA to capture interest from major strategic buyers and achieve a higher multiple of earnings.