Mergers and acquisition
@imveurope
www.imveurope.com
Recipe for M&A success
Gabriele Jansen, owner and managing director of Vision Ventures, gives her advice on what makes a successful merger and acquisition transaction
Should I sell? To answer the question, let me first briefly talk about the owner’s motivation to sell their company. Typically, transferring a company into the hands of a new owner is associated with an exit scenario, meaning the owner wants to sell because they want to retire from the company and there is no natural successor. Until a couple of years ago, this was the main reason to sell in the vision industry. Today, however, more and more oſten there is an entirely different motivation from the seller’s side: selling the company as proactive growth strategy. Te company founders have developed the
company, the technology, the product range and have generated traction in the market leading to a stable company size. Eventually, though, the next growth step requires financial investment, and management skills and experience are needed that the founders do not necessarily have. Tis might be experience in establishing a global distribution network, the expertise to redesign the production
line for efficiency, or the skills for diligent cost management. Here, the owner needs external financing and additional management bandwidth. A very efficient way to get both is in joining forces with a larger player from the same or an adjacent market. In this case, the owner decides on a trade sale with the full intention of staying with the company and enjoying the growth and success that comes with being part of a larger entity.
When is the right time for an M&A transaction? Right now is actually a great time for transactions in the vision space. Te core technology is mature, but at the same time there is still huge potential for innovation. Tere are a lot of low-risk, established markets for vision products with annual growth rates of 10+ per cent, but also markets entirely untapped and ripe for conquering where annual growth rates can be 50 per cent or more. For the company seller, a trade sale can significantly ease market access through the
8 Imaging and Machine Vision Europe • Yearbook 2018/2019
buyer’s existing infrastructure or its financial and operational support. For the industrial buyer, the acquisition will shorten time to market, with new products or technologies for its existing sales channels. And, for the financial investor, vision is a highly attractive market segment with Industry 4.0 as growth driver and Industry 5.0 on the horizon as the next booster. From the individual seller’s point of view, the
right time for a transaction is, of course, based on the motivation to sell, but also strongly connected to the company’s readiness for sale. Te right time to make the first steps towards a transaction is ideally around one to two years before the actual sale, and again ideally around three to five years before the seller himself would like to exit the company.
What should a vision SME consider when preparing for M&A activity? A company preparing for M&A activity needs to have a good organisational structure, with
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