Stag Print’s guide to a successful acquisition
Mergers and acquisitions (M&As) can be a powerful tool for company growth. However, navigating them can be complex. Having successfully undertaken an acquisition ourselves, and our managing director’s prior experience in the field, we thought we’d share our top tips on how to approach the process.
What to consider
There is more to think about than meets the eye. At Stag Print, we approach it thoroughly and methodically, so that it is more of a journey than just a quick deal. Key things to consider are:
- Customer analysis
It is vital to educate yourself about the target business’s customer base. For example, the level of quality and service that they are looking for. Certain customers may be used to higher quality standards and happy to pay a premium, whereas others may be interested in quicker lead times or lower price points. A change in your service offering could lead to a loss of customers.
- Team integration
In family businesses, the employees often become an extension of the family – some having been around for 10 or more years. At Stag Print we really value our team; therefore, it is important to understand the company’s culture. The goal during the M&A process should be to utilise this new-found team to produce more.
- Financial planning
Acquiring another business is an expensive process and often involves taking on debt. While making leaps in production at the same time can be attractive, you need to ensure you can keep the cash flowing in. You should be prudent with your customer’s debtor days and cautious with investments until the merge is in a comfortable position and some cash reserves rebuilt. This is where we have seen many businesses falter in recent times.
- Location
If the merging companies are not in close proximity, it can impact the logistics of sharing the work and team. The closer a business is to you, the easier an undertaking it will be.
- Machinery and process evaluation
When acquiring or merging with another organisation, some companies assume that the way they operate is optimal. This is not always true and learnings can be had from any other company. The aim should be to cherry-pick the best aspects of both businesses to create an even more efficient operation.
When and why
Timings are very much down to when you and your business are ready to make the move and what’s available on the market. Once you’ve made the decision, start tracking what’s out there. There are a number of M&A consultants that can help, and many businesses advertise their sale on websites. But our preferred approach is by tapping into our network, you’d be surprised at the recommendations and conversations that start once your network learns you’re open to opportunities.
In terms of why, as mentioned above, undertaking a merger or acquisition is a great way to grow your business in a complementary and cohesive way. But be patient. While many businesses have the perspective of quick gains, Stag Print sees mergers and acquisitions as a growth opportunity that needs to be nurtured. For any buyer or seller alike, the overarching theme should be to do right by your team, your suppliers, and your customers, who have stood by you all these years. The goal should be to set them up for long term success, the rewards will come later.
So, if you’re thinking of taking the plunge, good luck and go for it! And if you run a printing and packaging company and are looking to retire or sell, please drop us an email or give us a call, we’d love to talk. 😊