Why “Serial Acquirers” Tend to Be More Successful Than Those Making Occasional M&A Deals
There are many ways to ensure that a company is growing, one of those ways being through the acquisition of other companies to increase market share, to get access to new markets, to new technologies or simply to eliminate competition. In terms of how frequently a company engages into M&A as a method of achieving growth, companies can be serial acquirers, making at least one acquisition per year, or one-time or accessional acquirers. Out of the two types, serial acquirers seem to be more successful – here is why:
- Larger size – the companies that usually engage in serial acquisitions are larger companies, usually companies valued to over one billion, which also means that their financial possibilities are better upfront, at the first acquisition. If they use the right criteria and strategy to choose their acquisition targets, their capital continues to grow, ensuring a continuously growing buying power;
- Experience – the statistics show that the majority of M&A deals are doomed to fail within a year from closing. However, serial acquirers fare much better when it comes to the percentage of successful M&A transactions due to the fact that they accumulate experience with each one of their transactions, learning how to integrate the acquired organization.
- If you would like to learn more about the M&A process, or need support to help ensure a successful deal, contact https://ikadre.com/, for expert knowledge and consultation.