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Recent history has held a mirror up to many businesses large and small and in a broad spectrum of markets. The mirror has revealed weaknesses in many business models. Paradoxically, it has also revealed unprecedented opportunities and a one-off chance to reset corporate goals.
If you’re thinking about an acquisition sometime in the future, there’s no better time than the present to start planning about your approach. The key to buying another company is to do your homework, assess every possible option and build yourself a credible shopping list. So many people don’t follow those basic principles and, ultimately, their acquisitions fail to deliver the expected returns.
Lost in the noise of the ongoing troubles at Thomas Cook Group Plc is a gem of an opportunity – the company’s airline.
At Plimsoll, our clients often ask us which industries have the hottest M&A targets and most opportunities. Historically, the answer was simple: those with distressed companies that could be bought cheaply, restructured, and folded into an existing business.
As the world recovers from the last two years, companies are planning for the future. Board rooms across the planet are assessing their business’ standing in the aftermath of COVID-19 and, more importantly, deciding what their next strategic move is.
2021 saw more than US$5 trillion worth of M&A deals as more than 62,000 companies around the world changed ownership. For context, that is the equivalent of the entire German economy. No wonder banking and consultancy bonuses have led to a shortage of champagne.
Buying another company has increasingly replaced R&D to become the preferred growth and innovation strategy across many sectors of the global economy. As markets continue to grapple with the aftermath of the pandemic and a treacherous geopolitical landscape, the lack of stability needed to grow organically have seen the number of deals reaching record levels.
Mergers & acquisitions could be set to rocket over the next two years as companies increasingly look to move past the darkness of the past 18 months and into a period of strong recovery.
The key to ensuring a merger or acquisition deal goes smoothly and delivers on strategic objectives, is to do start your own due diligence from the start, assess every option and build yourself a credible shopping list. So many business leaders fail to adhere to those basic principles and, ultimately, their acquisitions fail to deliver the expected returns.
Eddie Stobart who recently suspended trading of shares after a multi-million pound accounting error that saw the firm’s profits shrink to a level which the Board has described as the ‘low end of expectation’, has been approached for potential buy-out by Dbay Advisors.
The road haulage firm started the year with an impressive performance, defying potential Brexit concerns with the prospect of a March departure, but suffered after a multi-million pound accounting error saw a decline in share performance. This could be what has motivated the firm that hold the third-largest share in Eddie Stobart to begin buy-out negotiations.
Plimsoll’s Road Haulage industry analysis shows consistent improvement in Eddie Stobart’s overall financial rating from 2014 to 2017. The company also came 7th in the industry for pre-tax profits, and 3rd in total sales in the industry back in 2017.