Serial Acquirers Successful in their Acquisition Plans
Posted by Carl Doerksen on Thu, Oct 15, 2009 @ 12:14 PM
Ted Rouse, co-head of global M&A for Bain & Co. Inc., has recently written a book entitled “Winning in Turbulence” (Harvard Business Press). In this book Rouse examines why “serial acquirers” are so successful in their acquisition plans, even during turbulent times.
Their secret? Instead of following the herd mentality and hunkering down and conserving cash during recessions, these successful serial acquirers actively look for deals. They know that investments made in today’s market will generate the greatest returns in the long run.
Abbott Laboratories (NYSE:ABT), Medtronic Inc. (NYSE:MDT), Danaher Corp. (NYSE:DHR) and Illinois Tool Works (NYSE:ITW) are a few of the companies that Rouse examines as successful serial acquirers. And there are others that also come to mind. And what traits do all of these firms have in common? According to Rouse they exhibit these characteristics in their acquisition strategies:
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Have a clear deal thesis that puts on paper the logic of the deal and the assumptions on which it's being pursued
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Conduct transactions that are relatively close to their core
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Avoid swinging for the fences ("The worst performing acquirers," says Rouse "are those that buy infrequently, and when they do, they do large transactions."),
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Buy throughout the economic cycle
As we have said before, smart money knows that now is the time to buy. Serial acquirers that are successful are following these principles in today’s market to expand market share in preparation for the next economic boom. You should begin preparing for the same boom.
If you are looking for more information around M&A’s, visit The March Group’s Corporations for Sale Web site!