Supporting an acquisition: developing the deal logic, advising on due diligence and implementing the growth plan post-acquisition

Industrial supplies, Italian listed

Context

The UK executive were keen to grow their business and their Italian owners were equally willing to fund new acquisitions, if the right opportunity arose.

Solution

As an existing client, we’d supported the development of their organic growth plan: identifying target sectors and business casing the investment and returns. To achieve extra-ordinary growth however, it was obvious that the business should consider acquisition, so we developed the framework for evaluating the options and within that, identified potential targets.

The deal logic we developed was to focus on

• Adding capabilities, rather than extending geographical scope within the UK, and bringing a broader offer to new and existing clients

• Gaining access to significant OEM buyers

• Adding our client’s capability in sales and marketing to an acquired business that was historically under-sold.

A third party process quickly identified potential targets and Firehills supported the due diligence work, alongside financial and legal advisors, on a target firm which was successfully acquired.

What followed, and is still ongoing, is the work of realising the value of the deal. This has been partly about realising the immediate cost savings but is currently focussed on:

• Ensuring there is rigour, pace and accountability for realising the sales and marketing plan

• Establishing a new industrial plan that will capture new flow and medium term efficiencies

• Implementing a new management team and management rhythm, with new accountabilities reflecting the breadth of the business

Outcome

With the new acquisition the UK business grew by 20% and there is significant opportunity for further revenue and margin growth.

Managing across the breadth and depth of the business requires new ways of working and new accountabilities for many of the executive. The team are excited by this, and it’s a step change in what opportunities they can pursue.