To acquire or not to acquire, that is the question

A multinational consumer goods company with headquarters in the Czech Republic was interested in expanding into the U.K. through acquisition. To assist them in making this significant step, they approached us to help them define the decision criteria.

We had about four months and an international team of consultants to come up with our recommendation. Our first task was to determine the value of the target company, which meant spending time processing information on brands, competitors, buyers and consumers to build a sound valuation model. As we received data from the target company, speed and accuracy were our priorities.

It was not until the final stage of the engagement that we had time to look at personnel issues related to the acquisition. We discussed what a particular move or announcement by the candidate company or one of the competitors may lead to, and what our optimum response would be. Digging deep into the client’s situation it became evident that integrating the two cultures of the company would be the biggest challenge.

With hindsight, it was this final stage that had the greatest impact on our recommendations and on the wrap-up of the engagement. In the end, the client decided not to acquire the local company, based on the results of our analysis. Our findings and recommendations helped the client make a decision that was in the best interest of its long-term growth plans.