We’ve seen massive changes in the M&A market in recent years, but the public perception of the industry is still catching up, and if you’re not right here in the trenches it would be easy to miss.
When they hear ‘mergers and acquisitions’, many people think of giant, amorphous conglomerates endlessly consuming small companies, Pac-Man style, in the name of world domination. But that’s changing fast.
This article from the Harvard Business Review highlighted this shift, and got us thinking about the ever-growing list of companies looking to use M&A to plug gaps in their offerings. The obvious additions are products, technologies or other directly applicable commercial elements, but the complexity of the business landscape, along with fluctuating regulatory requirements, means savvy companies are thinking more broadly. The smart acquirer is now always on the lookout for a complementary addition across logistics, compliance, ESG and more.
Today, the M&A industry, and particularly LAVA’s approach to it, is much less about the biggest, and much more about the brightest.
The right piece of the puzzle
Previously, Japanese communications giant, Softbank, acquired semiconductor specialist Arm precisely because of the potential of their architecture in enabling the Internet of Things, where connected devices and systems can streamline and automate decisions and processes based on real-time data. This strategy is now becoming far more prevalent in manufacturing industries too, with carbon-heavy sectors like steel production and other manufacturing looking to connected data and virtual twin solutions to forecast the commercial and environmental impacts of any potential changes, before they happen, allowing them to approach any potential deals with all the relevant information.
In 2023 we handled the sale of UK space engineering business, e2E, to Telespazio UK. Whilst also a compelling growth play, one of the key value drivers was e2E’s existing business relationships and position in the UK market, allowing Telespazio direct access without the time and effort of initiating these relationships from scratch. Add to this the even more exciting opportunity to consolidate complementary engineering expertise in a very challenging recruitment space, from ground segment and satcom systems experience to spacecraft and payload capabilities, and this became an unmissable opportunity.
We’ve already talked about the increasing importance of a company’s ESG credentials when preparing for a potential sale, and how they can not only affect your valuation, but even lose you a buyer if they’re not up to scratch. This means many companies struggling to develop and deliver a solid ESG strategy on their own will often look to acquire companies who can provide an instant uplift. Similarly, the partners and third parties a company works with are becoming more important. A logistics partner with high emissions and no dedicated ESG strategy suddenly becomes a burden to be shed prior to any potential sale. Conversely, a third party with a plan in place and demonstrated success in reducing their emissions, becomes the partner of choice.
It’s only by taking a step back and looking at the broader picture that you can identify the missing pieces of your particular puzzle, and make plans to fill them.
The bigger value picture
It’s not just acquisitive companies who can benefit from M&A-driven business transformation, but the acquired, too. In 2022 we worked with environmental services group, Cura Terrae (Latin for ‘take care of the earth’), to combine their three distinct offerings under one umbrella. This merger made sense not only in order to ensure their continuity, but also to enable them to realise the efficiency and cost savings inherent to a range of centralised services. This kind of strategic consolidation can transform the prospects of a company without compromising its ideals, output, or culture, and frees up their ESG experts to do what they do best.
Similarly, our 2023 deal to bring Kura, technology driven school transport provider, into the Zeelo family, not only provided significant opportunity for growth, but also ensured that the company’s mission to transform school and commercial transport had the backing and reach to really transform the industry.
The LAVA difference
At LAVA, we’ve taken this transformation-over-transaction approach right from the start. Instead of aligning ourselves to a specific industry, sector, or deal size, we’ve thrown off the traditional markers of M&A success. We intentionally build and develop our team of creative, driven individuals with the highest technical skills in their respective areas of expertise. Our diverse backgrounds and experience mean we have every angle covered, from company storytelling and origination, right through to the most complex elements of the deal process.
At the heart of the LAVA difference though, is you. We work across such a vast range of deals because the thing that gets us out of bed in the morning is the challenge. We’re always seeking a niche business problem that we can use our creative, bespoke approach to solve, providing you with the exactly the solution your specific business needs.
No two deals are the same, and so every single one we do is treated as the unique opportunity it is. Even if you’re not looking to buy or sell right now, our team of experts can talk you through everything you need to know to be prepped for success, whenever the time may come.
