Acquisition of Business
Our clients generally aim to get the maximum return on investment when they seek to grow through acquisitions. Bridgehead contributes to creating additional value by combining strategic expertise and long transaction experience with an extensive network of contacts.
Our methodology is designed to identify and evaluate strategic opportunities in collaboration with our clients. Our analytical work is also the basis for valuable advice in identifying and ranging the different criteria that are most important in searching for a target.
To identify companies that meet the buyer's acquisition criteria best, our global network is a highly effective tool.
We organize annual conferences where our clients get the opportunity to meet our colleagues from around the world to be presented to and discuss general or specific acquisition opportunities.
Critical Success Factors
Erroneous assumptions and hasty decisions in connection with a business acquisition is often the reason for choosing the wrong targets or fail to reach an agreement with the seller.
Taking into account the following factors greatly increases the likelihood of identifying businesses that add the most value and of closing the acquisition:
Know your company's strategic potential: To grow through acquisitions, it is essential to have a conscious awareness of the value drivers that are most important for your business, and the opportunities that exist in order to strengthen these drivers.
Value is created through appropriate strategic positioning, and board and management should continuously assess how the business will look like in two to three years. What are your business strengths and weaknesses? What opportunities and threats do we need to relate to? Are there market changes that require internal adjustments? What is needed to enhance the competitiveness of the business?
We have extensive experience with evaluating strategic aspects of operations in various stages of the life cycle and in most industries, and our approach places great emphasis on the importance of the strategic rationale for any transaction.
Identify Correct Acquisition Target: Is it increased sales or lower costs that provide the greatest impact on business profitability? How is competitiveness affected if the business gains market share, and at the same time eliminates a competitor? Could your business reap a significantly larger share of value creation if it controlled a larger part of the value chain? Is it possible to offer a significantly broader range of products through your existing distribution set-up?
It is not always optimal to acquire a competitor. Often, the most value-adding acquisition may be that of a customer, a supplier or a related business that offers complementary products.
When acquiring a business, it is important to look beyond what your business is today, and try to estimate what your business can be two to three years under your ownership. It is better to pay well for a good match than to pay less for a target of lesser strategic fit.
Our clients know their business and market well. We find, however, that we can add much value by looking at the business from the outside when discussing various strategic opportunities in preparation for an acquisition.
We are focused on good strategic solutions, and we often create a "synergy-adjusted business plan" for our clients. This plan focuses on how a business can be further developed through one or more acquisitions. As we identify appropriate acquisition objects, we model how the purchase of the various objects will contribute to creating value in your business.
Be the Active Party: Few owners are actively out in the market to sell their businesses. Despite this, there is always a significant share of owners willing to discuss their ownership, and some have already come a long way in the decision making process. To approach these, and present a good strategic solution, will generally be an excellent starting point for a successful acquisition.
As a buyer, there is always an advantage to obtain exclusivity to negotiate with the seller. Exclusivity strengthens your bargaining position and it gives you a better opportunity to become familiar with the company and its management.
If there are multiple potential acquirers, exclusivity can be difficult to obtain, but when the strategic rationale is compelling, it will be possible to persuade the seller.
We have extensive experience in structuring the acquisition process in a way that protects the buyer's need for the initiative, exclusivity and confidentiality, securing our clients the best possible negotiating position at all times.