Strategic Acquisition Support

Overview

One of the challenges in acquiring a bolt-on business is accurately identifying the potential synergies and opportunities for improvement.

One of the challenges in acquiring a bolt-on business is accurately identifying the potential synergies and opportunities for improvement. Closely related is the challenge of getting the acquisition fully on board and working closely together with portfolio companies. PMG’s Customer Insight has proven helpful in accomplishing those goals. We recently completed a study of two businesses operating in the same narrowly-defined market space. However, they each focused on sectors of the market largely ignored by the other. Even their customer bases hardly overlapped. So, it appeared to be a perfect match.

 

In conducting the survey of customers for each business, we discovered that the portfolio company was perceived to be performing well ahead of the target. The primary difference – and the source of most of the rating differential – appeared to be within the sales organization. In the target company, sales reps were tasked with post-sale follow-up, while in the portfolio company, that task was the responsibility of the engineering staff. Not surprisingly, sales reps wanted to get to the next selling opportunity while engineering staff couldn’t wait to get their hands dirty with a new product installation or rebuild. As a result, customers of the target company complained vociferously about poor responsiveness after the sale.

PMG identified four key areas of performance that presented one of two opportunities.

 

1)      If the performance attribute was a strength for one business and a weakness for the other, that was teed up as a benchmarking opportunity.

2)      If the performance attribute was a strength for both businesses, it was identified as an area where common strengths could be leveraged.

 

The table above summarizes project results. Areas to leverage are identified with a large + sign. Areas where benchmarking may help to identify areas where best practices may be transferred from one business to the other are identified with a double-headed arrow.

 

This analysis helped to establish a positive dialog between the two businesses, and served as a roadmap for initial improvement efforts.

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