Given the current economic climate, our focus at Lion People Global is increasingly on finding approaches that are going to deliver sustainable growth and resilience.
And that’s whether you’re considering acquisitions as a key component of that growth strategy, or if you want to build value towards an exit where you sell your business to another entity.
In this blog we want to focus on achieving growth through the right acquisition strategy.
For companies that decide to embrace M&A, they first have to be able to demonstrate that they are successful at growing the business they have, and doing so sustainably. This will build confidence when you start looking for investment.
If you are looking at an acquisition as a way to cover up for under performance, that’s not going to turn any heads. What does turn heads, is when you can show how successful you have been at growing your business. And demonstrate that if you make an acquisition, you can go from A to B and make a massive leap in company size.
These companies have started by coming up with a plan that integrates M&A as a growth-enabler. And this plan results from strategic planning sessions where you say; this is why I exist as a company; this is the kind of client that I want; this is the market that I’m after; this is my value proposition; and this is what I’m going to require in order to deliver on all of these.
So the plan looks like a consistent narrative and it looks like a believable and compelling story when you go asking for money in order to make all of this possible.
Of course, all of this requires the right talent and the right experience, the right instincts, the right calibrating skills and good advisers, which is all definitely easier said than done.
But if you have all of that and there is a set of acquisitions that is well orchestrated, well risk-mitigated within the company strategy, and it delivers that sustainable growth and resilience, then M&A can definitely tip the scales in the right direction and propel the company to the next level.
According to Olga Blasco, M&A Principal Partner at Lion People Global, one of the most overlooked parts of an M&A growth strategy is the human factor.
“You need to understand how much stakeholder motivations and succession plans can impact the return on investment of a deal, the culture of the organisation and the performance of the business,” Olga says.
“Because if some of these things are underestimated, they can put a spanner in the works and it can impact the timing of other acquisitions. As in, we were planning to go for another acquisition, but given the difficulties that we’re experiencing with this one, we need to postpone whatever comes next.
“That is why it needs to be well-managed from the beginning and understand the effort that it will take to make the deal structure deliver that value.”
If you want to know more about this area, visit Lion People Global’s website where you can watch back our M&A Talks series of videos and fill out a questionnaire that entitles you to one hour’s free consultation on getting a LSP or language tech business ready for sale.