Opportunistic Acquisition


It is often the case that there is a lull immediately after any corporate deal, whether it is an acquisition or a finance-raising. The energy required to complete the deal often drains all those involved, and there is almost a natural break after completion to recharge batteries. However, it is our experience that the immediate aftermath of completion is when most activity is required, whether this is to get the right disciplines in place or to achieve the synergies expected from post-acquisition integration.

It has been about 18 months since ACS (the formal menswear business) acquired its largest competitor out of administration. The competitor had traded under the Etiquette Formal Hire brand for many years, but had fallen onto harder times as it struggled to maintain service levels and operational control as it grew. It also found it increasingly challenging to achieve acceptable returns on investment.

The acquisition itself had several notable features. The most challenging was having to re-bank very late on in the deal. The incumbent bank had put several hurdles in the path of previously agreed outline terms very late in the day. This left the company in a very difficult place where it was under serious pressure to complete without funding in place. The Clydesdale Bank stepped in and offered acceptable terms very quickly, but the company still had a very difficult decision to make when this funding wasn’t wholly in place; whether or not to sign the deal with the administrator.

We did sign the deal and thankfully we succeeded in getting the money delivered in time to complete the acquisition!

There was considerable emotional energy expended in completing the deal, and it would have been natural to have a pause to recharge before addressing the integration challenges. Wisely ACS did not do this and immediately embarked on a process of integration of the acquisition into its own business.

18 months on ACS has successfully managed the planned integration. This involved immediate effort to keep customers on side, relocate operations and bring the acquired rental stock up to a similar standard as ACS’s existing stock. The prize has been that the company has achieved a step change in scale which has transformed its business and paved the way to record sales and profits.

This is a classic case on the benefits of having an integration plan pre-deal, and executing it immediately post-acquisition and reaping the planned benefits.

Paul Yacoubian
About the author

Paul joined Craig Corporate in 1988 and is responsible for leading its development in both of its key service areas, business management and corporate finance. He...
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by Paul Yacoubian