Various goals can be pursued with Buy&Build, e.g:
1) Geographical expansion
2) Portfolio expansion
3) Scaling effects (cost / sales synergies)
4) Market rationalisation
5) Strategic: Preparation for exit (investors, founders,…)
In our specific case, the buyer wanted to leverage its own USPs (market access, brand, supply chain) and was looking for a complementary portfolio.
The company, based in Germany and with a global distribution network, was open to acquisitions worldwide as long as the business case was attractive and represented a strategically sensible expansion.
We found what we were looking for in the UK with a strong local player that had built up both a retail and distribution business and was even a competitor in certain portfolio areas; the company was on the verge of profitability.
The acquisition target was very interesting as several value levers could be realised:
1) Cost synergies in sourcing
2) Cost synergies in the indirect area (people, systems, processes)
3) Strengthening market share in the UK; market access in EU retail
4) Portfolio expansion for a global rollout, especially USA & Europe
After approx. 9 months of exploratory talks, intensive due diligence, strategy and financing, the time had come: the takeover was perfect!
Not to forget: work begins really after the acquisition! Post-merger integration requires intensive preparation. Many M&As do not achieve their goals because they are sloppy in this regard, which is extremely painful, especially for start-ups.
And after the acquisition is before the acquisition in a buy & build strategy!
