Case Study: Acquisitions

The opportunity: A company wanted to create a third division, both for diversification of cost drivers (versus its other two divisions) and as growth in the oldest division slowed.

The paths:

1. Discussion with company leadership, and ultimately the board, provided "guardrails" around level of investment, relationship to existing businesses, and life-cycle position.
2. An environment scan identified over 100 early-stage categories, which was narrowed with additional research into category attractiveness and fit to one category.
3. Similarly, 100+ companies in this fragmented category were identified, with over 50 of them contacted.  Site visits reduced this list to the final 2 businesses that were acquired.
4. Concurrently, a market development strategy was developed, which drove select technology investments upon acquisition and further acquisition discussions.
   

The results: A third division was established with the two acquisitions in a category that was still evolving, diversified cost drivers, but still related to the original two divisions.  Additionally because this division was positioned "closer to the customer" (without endangering existing channel relationships of the other two divisions), the company was able to gain important insights into the market for all three divisions.  Finally, the new division hit most of the key acquisition plan benchmarks, despite a concurrent economic turn-down.

See the potential benefits WisePath Strategy can help you achieve navigating value creation through acquisitions.

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