Acquisition Target Search Case Study

Know your options; Monitor targets

Situation
  • The Client, a global industrial group, wanted its machinery business to expand China production capacity to supply global markets and increase market share in China
  • The Client wanted to compare the costs and benefits of setting up its own manufacturing company versus acquiring an established Chinese company
Approach
  • Worked with Client to define the qualities and requirements of an “ideal” acquisition target
  • Compiled a preliminary Target list containing all potentially interesting targets (>50 companies)
  • Face-to-face, senior-level management interviews and site visits with all high-priority targets
  • Presented the Client with profiles of the 10 targets that most closely matched the Client’s criteria
Result
  • The most attractive Target (a company with a brand targeting the ‘affordable market’ and nationwide distribution channels) was an attractive alternative to a Greenfield plant.
  • At the time of the search the Target was not interested in an acquisition. However, our Client maintained contact and, following the financial crisis of 2008/2009, was able to take a majority stake in the company at an attractive valuation.