ECI has supported its portfolio to make over 70 acquisitions, which means we’ve seen the power of an effective acquisition strategy. We’ve previously discussed the importance of the right M&A strategy, but the M&A market is highly competitive. How do you turn that strategy into successful execution? The ECI’s Origination Team, who are on hand to support management teams throughout the entire life cycle of acquisitions, and our portfolio, share the top five secrets they’ve learned.
1. Smart use of technology
Technology is a supercharger for buy-and-build strategies. Sourcing and market mapping can be very manual, time-consuming and low value-add, with desktop research and laboursome data collection recorded in a spreadsheet. This kind of work is ideal for automation. But what does that look like in practice? Hamish Paget-Brown who helped develop ECI’s AI opportunity sourcing and prioritisation tool, Amplifind™, comments:
“While off-the-shelf sourcing tools can still be quite inaccurate, and difficult to tell if you’re getting a whole market view, data collection is much more straightforward. Third-party data aggregators can quickly populate things like financials, ownership or location to help inform decision-making. Data is useful, but Excel, decks and presentations are not easy to share and collaborate on and go out of data very quickly. Collaboration is key and that is much easier if you use BI tools such as Tableau or PowerBI. A CRM is ideal if you are very active with M&A. Because you can customise the UI you can focus on what is key to your business. Whether it’s a dashboard or a CRM, one lesson we’ve found valuable is making sure there is a single source of truth and trying to use the tech tool for live meeting agendas and actions. We have found that way tech can take the heavy lifting out of prioritising and managing their M&A pipeline”
2. Win strategies
Once you know your top targets, how do you change your strategy to effectively win the deal? Skyler ver Bruggen, Director in ECI’s Origination Team, not only thinks through these strategies for ECI’s own pipeline, but also works closely with management teams to think through effective strategies. She comments:
“Firstly, your win strategy may differ between ‘on market’ and ‘off market’ acquisitions. This will influence the speed at which you’ll have to move, and the competitive dynamics. In both cases, it’s important to think about the different stakeholders. One thing I’ve found is that it’s important to give yourself some space outside the usual deal conversations to do this, and make room for some ‘blue sky thinking.’ The relationship is key. Who are the most important stakeholders and how well do you know them? If there are gaps, how can you do more? Then think about what motivates each of the stakeholders before putting forward an offer. Will your offer meet those motivations? Understanding your M&A pipeline as a whole also plays a role. How important this acquisition is to your growth strategy? If it scarcity value or brings a product or capability you need, that will influence what price you can pay to win.”