Aquisition Hunt (Buy Side)
CASE STUDY: SensorCo
Greater critical mass required to continue to win share.
SensorCo is a large public manufacturer of a broad range of products for respiratory care.
SensorCo's CEO was interested in acquisitions in order to build critical mass in the marketplace.
As technology matured, volume discounts and bundling were becoming increasingly important.
A key criterion was to leverage a strong salesforce across multiple customer groups.
Only pursue acquisition targets with good strategic fit.
Stop reacting to opportunistic proposals from investment bankers.
Internal acquisition evaluation had been time consuming and frustrating due to mostly react-mode process.
There was little management time available to systematically identify and choose important targets, and there were apparently hundreds of potential compaines that appeared to meet at least some evaluation criteria.
While the CEO envisioned multiple possible acquisitions, he did not want internal resources distracted from running the core business.
The CEO hired Quattro to devise a comprehensive, proactive acquisition strategy.
Worked with management and Board to clearly define a set of acquisition criteria and initial range of reasonable acquisition choices given strategy goals.
Led a team to exhaustively identify and do preliminary assessment of all potential candidates.
Derived a first target list. (Strategic Pruning)
Conducted in-depth customer, competitor and acquisition candidate analysis to refine targets into short list. (Opportunity Targeting)
Worked with CEO to implement a campaign to approach those companies.
Numerous Successful Acquisitions. Large Increase in Shareholder Value
SensorCo bought and integrated several acquisitions over a period of four years.
Company market value more than doubled, and company was later bought by a larger medical conglomerate.