Mergers and acquisition
second level management in place; financial and IP documentation in place and accessible; and market assessment and sales planning both defined. For an SME, which can have restricted resources, this is a challenge; it requires time and attention to prepare the company and manage the process, while at the same time making sure the business doesn’t suffer as a result. It also needs to be understood that an M&A
transaction is a highly complex project that involves a range of different skills and specific expertise. For most company owners, an M&A transaction is a once-in-a-lifetime experience and arguably the biggest project the company has ever had. For all these reasons it makes a lot of sense to enlist the help of an experienced M&A project manager – an M&A boutique or investment bank – to improve the chances of success and allow the company to continue its operation as untroubled as possible.
What is specific about M&A activity in the machine vision sector? Obviously, buyer and seller are looking for the perfect match in a transaction. Te seller – in the vision industry, in most cases, the founder of the company – wants to ensure the company’s future and the employment security for their team. Te buyer wants a smooth integration, wants to raise the identified synergies, and wants a dedicated and happy team that will stay with the company. None of this is necessarily specific for the vision industry. Te particular challenge in
reaching these goals in the vision sector is the complexity of the vision ecosystem, which is very heterogeneous, covering a whole food chain from the image sensor to the turnkey machine. It is global in nature, but consisting largely of small and even tiny players. Tus, it is an art to find the perfect match between a buyer and a target, or between a seller and the perfect acquisition. It needs an expert with a thorough understanding of vision technologies, and a broad and deep network in the industry that covers imaging, machine vision and computer vision across Europe, North America, and increasingly China, to facilitate this.
What makes machine vision companies attractive to a buyer? Machine vision is a core technology for Industry 4.0 and the industrial internet of things (IIoT). Computer vision is important for autonomous navigation, logistics, precision farming, smart
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cities, and security, to point out only some of the emerging fields. Te business potential is mind-boggling over a vast variety of industries. Te vision ecosystem is driven by agile innovative SMEs with a lean and efficient structure and talented teams. Who would not be interested in that? Buyers come from very different backgrounds:
The right time to
make the first steps towards a transaction is ideally around one to two years before the actual sale
larger players in the vision ecosystem strive to grow, not only organically but also through acquisitions; automation and sensor companies want to augment their product portfolio, especially in light of Industry 4.0; machine builders have a growing interest to own vision as a core technology and a key differentiator to their
competitors; manufacturers of smart products want to shorten their time-to-market by acquiring IP and talent; and, last but not least, financial investors from venture capital firms through to private equity companies and family offices are attracted by the high growth potential of the field.
How do you get the best deal? First and foremost, the best deal is to be found with the best partner – the target company and the acquirer that fit together best. To identify this match you have to identify what ‘best’ means for you. A buyer might want to start by designing
10 Imaging and Machine Vision Europe • Yearbook 2018/2019
a vision acquisition strategy that clearly lays out what type of company fits their needs in terms of product and technology, but also in terms of customer markets and regions, company size, type, structure and culture. A seller must be very clear about the company’s strengths and weaknesses – as they would appear to the buyer – to be able to identify which type of buyer would be most attracted. Tis is the buyer with the best valuation and the best future home for the seller’s team. Beyond this crucial initial step, there are
numerous considerations on the path to the best deal. Let me point out two with significant impact: firstly, the purchase price is definitely not the only consideration. Te contract has a lot of fine print that can either sweeten the deal or turn it sour. Secondly, pay attention to the cultural differences between a typical founder of a high-tech SME and a typical buyer with either a corporate or an investor’s mind-set. Tere is a lot of opportunity for misunderstandings along the way when going through the letter of intent, due diligence and contract negotiation, because of differences in background, expectations, corporate culture and, as is oſten the case, language and national culture. Having an ambassador in between can save both sides a lot of time, money and nerves. O
Vision Ventures is a boutique M&A advisory for company buyers and sellers specifically in the machine vision and computer vision markets. The firm has managed transactions for Odos (acquired by Rockwell), HGV (acquired by Carl Zeiss), Tiama (divested several business divisions), Awaiba (acquired by Cmosis) and Ambienta (Lakesight project), among others.
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