With strains on the market mounting over the last couple of months, business owners and corporates have looked to a different approach for staying afloat in the current climate. Instead of big leaps ahead via large-scale purchases, many businesses have smartly adapted by choosing a more step-by-step approach when working towards their growth strategies choosing growth via bolt-ons.
Buy and Build – The Way to Go
With large-scale transactions down from last year by a substantial portion, small to mid-tier acquisitions have currently moved into the foreground. This has led many businesses to look to smaller “bolt-on” opportunities to help them realise their expansion goals and adopt Buy and Build strategies which allow corporates to effectively scale costs while they struggle to secure adequate finance. Corporates with the necessary funds at their disposal and the ambition to rise to the occasion have a once-in-a-while opportunity to get ahead of the competition while profiting from the presence of deal-ready sellers looking to exit the market.
Building on Economies of Scale
With corporates increasing their economic reach and the size of their operations by means of several smaller to mid-sized transactions, businesses are able to take advantage of the resulting economies of scale to soften the blow from heightened interest rates and prices of borrowing and brace themselves against any further fluctuations that might rock the market. Corporates will be able to build on economies of scale and take advantage of its many perks to propel themselves forward and get ahead of the market’s turmoil.
Looking for an Exit?
Sellers who are looking to exit are faced with buyers who will keep a close eye on how well they have their business in order. Even smaller deal-ready sellers with stable balance sheets and well-thought-out exit strategies will have an advantage over other businesses as demand for bolt-ons continues to grow, with increased demand opening the potential to sellers achieving enhanced exit values for their businesses, as long as their operations meet buyers’ current stringent demands. For many sellers, having a robust and realistic plan will be key to success.
As a broker Altius Corporate Finance has specialised in small to mid-level business transactions, making us the perfect choice for businesses looking to seek growth via bolt-on acquisitions. Our deals pipeline remains strong, and our portfolio of opportunities well stocked. Contact us now and talk to one of our experienced sales negotiators regarding your five-year plan and find out how we can help you optimise it to achieve the best possible outcomes for your business. On the side of sellers, ACF has a proven track record of assisting sellers with their exit strategies. Our team has endeavoured to shorten the timescales at which businesses sell while providing sellers with
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