Building Value through Acquisitions

Business owners have multiple tools at their disposal as they consider how best to increase long-term shareholder value and returns. Strategic acquisitions are one option and can strengthen a company and position it to capitalize on future trends and opportunities, changing the composition of the business in a manner that could not otherwise be achieved organically, either easily or within a reasonable timeframe. But the statistics are daunting: various sources estimate that as many as 70% of all corporate mergers fail to create meaningful shareholder value. How do you avoid this result? How do you make sure you are pursuing the right acquisitions?

Key Deliverables

Developed a customized and highly targeted growth by acquisition plan, aligned with the client’s specific situation and objectives

Secured financing commitments to support the company’s acquisition strategy in advance of contacting targets

On behalf of our client, approached multiple targets not already for sale and led all discussions, analysis and negotiations

Ensured acquisition efforts were consistent with the company’s overall strategy, non-disruptive to the core business and accretive to shareholder value

Situation Summary

A fourth generation family business owner set as his goal the ability to hand his son a stronger company than his own father had passed down to him. When it came to considering acquisitions his Board of Directors recommended involving expert advisors and he was introduced to Bulkley Capital.

Over the course of ten years we have helped this client complete three acquisitions, each of which served specific strategic objectives and contributed to significant increases in company value. We have succeeded by designing and adhering to a customized acquisition strategy, aligned with the company’s key objectives and based on a proactive and highly selective approach to the market.

The plan developed with our client identified the segments of the business where their competitive standing was strongest and where further market penetration and product diversification would realize the greatest returns. We arrived at a set of specific financial, business and operational criteria defining the type of acquisition that would be right for our client. Finally, we prioritized product categories and generated a list of target companies meeting these parameters.

As part of our preparation, we also analyzed our client’s financial capacity, agreeing on how much debt we were willing to take on and defining the size of deal we could reasonably afford. Before approaching targets, we managed a process to secure committed acquisition financing from a bank. The best opportunities are often those that are not already for sale, but you risk losing a deal if you can’t tell a willing seller where your money is going to come from.

The acquisitions completed to date have given our client a valuable foothold in an international market where they foresaw significant growth for a core product category; integrated the brands of a primary competitor; increased margins through operational synergies; enhanced in-house technical capabilities; and provided an entry into two new complementary and highly profitable niche markets.