Acquisitive Growth
Our client (a global hardware and software technology business) had recently entered the Broadcast Technology market – they had identified this in their strategy as a new market vertical through which to grow their sales of their hardware and software solutions.
Scaling this business organically was well underway, as their sales and engineering teams generated and converted new sales leads. However, as with any organic growth plan when you are building from a small base showing big P&L impact can take time. In this case, sales cycles were also lengthy (typically 1-3 years), so showing impact of the new strategy was going to take some time.
To catalyse the growth plan it was decided that the business would seek to acquire one or two small-to-medium sized players in the new market vertical. Not only would this provide an immediate boost to the P&L for this new business line, but it would also bring in additional talent and know-how to support the organic growth plan.
Our client identified a target organisation for acquisition, but did not have the industry expertise to properly assess the target so engaged Elliott Media to provide the acquisition target assessment.
Acquisitive Growth
Elliott media carried out a detailed assessment of the target’s proposition and product portfolio, providing a clear evaluation of where the value and risk lay if our client were to acquire the business. In addition, knowing our client’s product portfolio and roadmap, we were able to identify technology synergies and other opportunities which the acquisition could create for our client.
As part of delivering our findings, we spent a significant amount of time supporting and training our client’s executive team on the wider industry, technology and opportunities.
Result & Benefit
We determined clearly where the real value lay in the target’s complex product portfolio, which was actually only a small number of products as well as some of the supporting drivers and software. Looking in detail at the product showed that many were approaching end of life and that the likely market for these would plateau/decline. This provided clear data to support the negotiation of a realistic price for the deal, as our recommendation was that only the valuable technology should drive an earnings price multiple.
Our assessment of the proposition showed clearly the synergy with our client’s roadmap and how, together, the businesses could accelerate the existing organic growth being pursued by our client. This helped to build confidence in the existing investment plan, but also enabled the organic growth plan to pull in returns due to the synergies identified improving the overall business case of entry into this new market for our client.
Finally, going through this process with Elliott Media left the executives much more confident in their understanding of the new industry they were building in and improved their ability to guide their own technology roadmap.