Acquiring a business. Accelerating business growth through acquisition

How to scale your business through value-creating acquisitions

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Whether you have your sights set on expanding into new locations, diversifying your services or building market share, acquiring a business could be an excellent way to achieve your growth ambitions quickly.

Acquisitions can be complex and time consuming. A clear acquisition strategy is essential when buying and integrating a business to realise the full potential of the transaction. As well as identifying targets that fit with your strategic rationale, you need to have the right team of professionals in place to support you, as well as a thorough due diligence process. It may be necessary to secure funding and to maximise success, so you’ll need a robust post-acquisition integration plan too.

At Evelyn Partners we have the specialist knowledge and hands-on commercial experience to help you every step of the way.

A clear acquisition strategy

Successful, value-creating acquisitions are underpinned by a clear strategy. You should aim for a clearly-articulated rationale that aligns with your long-term business plans and goals.

Our team at Evelyn Partners can work with you and your management team to assess the options available. We can provide support in designing and executing your acquisition strategy.

An expert adviser to lead an acquisition

With so many moving parts and levels of complexity attached to an acquisition, it can take time and expertise to get it right. That’s why businesses often turn to corporate finance experts to lead transactions on their behalf.

Our corporate finance department provides lead advisory services to acquisitive businesses. We can work alongside you, drawing on our extensive transaction experience to provide impartial advice and leadership throughout the acquisition. This includes:

  • Support when designing an acquisition strategy
  • Helping to refine acquisition criteria
  • Identifying and approaching potential acquisition targets
  • Providing advice on the structure and valuation of the acquisition
  • Negotiating the terms of the transaction
  • Advising on acquisition funding if required

Oaklins International

As a founding member of Oaklins International, we are extremely well placed to support international expansion. Through Oaklins, we can support clients across the globe.

Acquisition due diligence

Thorough due diligence is important when exploring any acquisition. It provides a valuable insight into the target business and information on past and projected performance, so you can validate assumptions and make informed decisions at every stage.

We can carry out due diligence on your behalf, investigating and analysing the business you are planning to acquire. The scope will depend on the complexity of the business and your requirements but will typically cover:

  • Historical trading performance, underlying earnings and cashflows
  • Future trading performance and cashflows
  • Working capital requirements
  • Debt and debt-like items (for potential pricing adjustments)
  • The key risks and exposures the business may have
  • The robustness of the financial control environment and accounting
  • The tax profile of the business, covering corporate tax, employment tax and indirect taxes
  • Share schemes and pensions
  • IT, systems and other operations
  • The identification of synergy opportunities to improve cost savings
  • Any additional costs potentially involved with the integration
  • Tax structuring to understand the implications of the proposed transaction structure and solutions to ensure efficiency

Our experts determine the scope of work involved and tailor this to your situation and requirements, while focusing on the factors most important to you. We will give you our honest opinion, along with a clear and direct solution that enables you to make informed decisions as part of the transaction. As well as carrying out financial due diligence on your behalf, we can also undertake commercial and technical due diligence exercises.

We consider how all these elements are incorporated during the negotiations and within the sale and purchase agreement (SPA) to maximise value, including the completion mechanism. At the same time, we strive to mitigate risks.

Successfully integrating an acquisition

Post-merger integration (PMI) may be the final stage in the process. It plays an important role in maximising the value from any acquisition and can often pose significant challenges for management teams as they juggle the integration alongside core business activities. This is the area where many acquisitions fall short and fail to deliver the original deal rationale.

There are many areas to consider in the integration plan, from cultural change management, to technological, as well as legal integration. Businesses commonly plan for integration by developing a 100-day plan, which covers key areas such as acquisition synergies, integrating and aligning processes and operations, as well as bringing together the people and culture from each business. From a tax perspective, our specialists support businesses to address key actions arising from acquisition structuring and tax due diligence, as well as identifying longer-term tax efficiencies for the combined businesses.

The earlier a business seeks professional advice surrounding PMI, the better.  Where businesses fail to generate value from an acquisition, it is often because they have left post-merger integration too late. Evelyn Partners has an experienced, specialist PMI team with a successful track record of helping businesses plan and execute integrations. We often work with clients to establish a post-merger plan before the acquisition even happens. Our experts consider findings from the due diligence process to ensure that integration mitigates risks and captures all opportunities.

Our PMI team can support you by:

  • Identifying and maximising opportunities to enhance value and achieve synergies
  • Advising on performance and activities required against your 100-day plan, including identifying the root causes of delays and issues, and in turn, advising on how to steer performance back on track
  • Working with you on a structured change management process that includes project planning, delivery support and monitoring
  • Providing a 360° review of your business, giving strategic advice and optimising funding models

Let Evelyn Partners help with your acquisition

To discuss your acquisition plans and find out more about how Evelyn Partners can help, book an appointment today. Our multidisciplinary team will support you every step of the way. Request a call back or call 020 7189 2400

Frequently asked questions

What is growth by acquisition?

Growth by acquisition is a type of inorganic growth. It typically involves one company buying another as a way to extend the existing business, for example by increasing its range of products or services, expanding into new locations or reaching new or different customer types. The aim is often to integrate the two businesses, achieve cost-reduction synergies and boost profitability. Acquisitions may also provide cross-selling opportunities to increase revenue and profit without incurring too much extra cost.

What are the benefits of growth by acquisition?

If planned and executed well, growth by acquisition can create a way to achieve significant growth rapidly. Acquisitions can offer businesses an opportunity to expand into markets that are difficult to penetrate organically or they can enable two competing businesses to pool resources and build market share while reducing their cost base. Business growth through acquisition can be high risk but also has the potential for high returns.

How do I grow my business through acquisition?

A clear acquisition strategy setting out your rationale and identifying opportunities is essential. You may need to conduct thorough financial, tax and legal due diligence on any acquisition target. Fund raising may be necessary and you’ll need to agree the deal structure. The final step is a post-acquisition plan to ensure successful integration, which is important to achieving value from your acquisition.

Oaklins Evelyn Partners is a trading name of Evelyn Partners Corporate Finance Limited, which is authorised and regulated by the Financial Conduct Authority.