Buy-side advisory

Increasing market competition makes organic growth more difficult. Under such circumstances active consolidation of the market is the only strategy enabling dynamic growth of the firm’s value. Acropolis Advisory offers its transactional experience gained in both domestic and cross border consolidation processes. Typically, the process starts with identification of potential acquisition targets, evaluation of their attractiveness and fit with client’s existing activities, as well as initial assessment of the willingness of their owners to enter into discussions. Key advantages of retaining an advisor here are:

 

 

  • limitation of the necessary time commitment on the side of the Entrepreneur (especially in case of cross border deals),
  • professional management of the transaction,
  • opportunity to keep the identity of the client in secret (if necessary) during the first phase of the process.

Similarily to other services, we suggest that the transaction process follows a detailed analysis of its impact on client’s business, assessment of the theoretical and actual ability to capture synergies and finally, evaluation of the impact of the acquisition on the future shape of the business.

Example:

Manufacturer of sport goods, having a large domestic market share, faced the problem of redefining its growth strategy. Its market position did not make it possible any longer to continue dynamic growth in the home country.. The preferred expansion area were developed European markets. The management of the company realized, however, that organic growth on these markets was difficult due to certain characteristics:

  • mature and stable distribution channels,
  • strong loyalty of customers towards existing brands, and
  • issues related to negative perception of Polish product origin by some European consumers.

Under these circumstances the company’s management decided to achieve growth via acquisition of a company already existing on the contemplated market (France and Germany). Because of the complexity of the process and amount of issues identified by the management, a professional advisor has been appointed. His role was to perform a market screen, identify potential acquisition targets, approach them and finally – run the acquisition process. Thanks to proper analysis of key success factors and well defined search criteria, the identified target possessed certain interesting attributes (such as strong distribution system and well recognized brand), simultaneously suffering from financial difficulties, which the acquirer was able to address through moving part of the production functions to the Polish plant. Proper evaluation of the market situation enabled the Entrepreneur to perform the acquisition at an attractive price and to consume significant synergies.