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Three Lessons from Successful Serial Acquirers

For many large global companies, acquisitive growth is a key component of the corporate growth strategy. But acquisitive growth can be frustrating. How do you find, buy, and integrate good businesses when there seem to be so few good targets, not enough funds, and no real guarantee of success?

A better question may be, “How do successful serial acquirers—those who acquire more and grow faster than their rivals—generate such great results when so many other companies stumble?”

A survey of these companies showed that the top distinguishing factor is a willingness to invest leadership time, money, and organizational focus on an M&A strategy in advance of making any particular deal.

More specifically, serial acquirers invest in three key areas:

  1. Building and Refining a Compelling Investment Thesis. An investment thesis is a clear view of how the company will compete and create value over time. It helps answer the questions “Why us?,” “Why now?,” and “How do we get there?” This is a proprietary view of how a company creates value, and it guides all M&A activity.
  2. Investing in an Enduring M&A Network and Culture. This requires developing internal capabilities, building an M&A network, and cultivating potential sellers on a scale that transcends any particular transaction. Senior leadership should be deeply engaged in the M&A process, and managers at all levels of the organization are expected to source and cultivate relationships with potential targets.
  3. Defining Distinctive Principles for the M&A Process. These principles define how the M&A process will be managed for discipline without adding bureaucracy. It’s less about the existence of such a process (“the letter of the law”) than the way that process is endowed with rigor and discipline by a set of underlying principles and policies (“the spirit of the law”).
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