Strategic acquisition is, in the eyes of many, the most lucrative form of business acquisition. In a strategic acquisition, a business is acquired by a strategic party, such as a competitor, industry foreign company or investor.
A strategic acquisition can be a good way for a business to grow. The company "buys" customers, revenue and market share in one fell swoop. For an investor, buying a business through a strategic acquisition can be a good addition to the portfolio.
- Strategic acquisition: competitor
Every entrepreneur looks at the competition with an oblique eye. For a competitor, a similar business may be an interesting acquisition target. This buyer wants to strengthen its own market position through a strategic takeover through synergy advantages, because the other company has developed a new technology, to offer customers a wider assortment or to negotiate a higher discount for a larger purchase volume. Yet some entrepreneurs have absolutely no desire to sell their business through a strategic acquisition to the man or woman who has bothered them for years. - Strategic acquisition: industry foreign company
A new market has high barriers to entry for an existing business. A smart way to still gain access to that market is to buy a business in that industry through a strategic acquisition. The buying company then does not have to fight for customers, revenue and a piece of market share, but buys an already "moving train. An industry foreign company, unlike a competitor, will not so quickly integrate the purchased business into its own company after the strategic acquisition, because the buyer still knows little of the market. - Strategic acquisition: investor
An investor is always interested in businesses with a lot of growth potential. For SMEs, this buyer is often an investment company. This investor finances a strategic acquisition with the money of informal investors, large private investors and investment funds in businesses. An investment company is not likely to run the business itself after the strategic acquisition. Therefore, these types of deals often go in combination with a business acquisition in the form of a management buy-in / management buy-out or the investment company itself comes up with an MBI candidate or MBO candidate. This entrepreneur is then the guy who runs tent, the investor advises him in the background.
3 trends of strategic acquisition
Growth through acquisition is faster, cheaper and much less risky than more traditional methods of growing a business. Large companies have known this for years; they constantly buy businesses to improve and increase their market position.
Strategic acquisitions are also increasingly common in SMEs. These are the 3 trends in strategic acquisitions in 2023:
#1 Private equity
The good news: there is plenty of money in the market. Especially the war chests of investment companies are well stocked and investors are diligently looking for good acquisition targets. That's also a good sign for businesses that need capital to make strategic acquisitions. And with the help of private equity parties, buying is just a little easier.
#2 Increased supply
Not only losers from the corona crisis will have to enter the acquisition market - by necessity. Winners too, propelled by higher sales figures, will start thinking about what is the most lucrative time to go into the shop window. That presents great opportunities for strategic buyers who are liquid now and have enough cash to do business quickly in the acquisition market.
#3 Across borders
In recent years there has been a trend in the number of cross-border transactions. Characteristic of this is the different nationalities of the buyer and seller. Because of its policy and tax structure, the Netherlands is particularly interesting to businesses from America and China, but Dutch buyers are also increasingly crossing borders for strategic acquisitions.
