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Growth & Acquisitions

A Three-Part Series by Will Stabler

About This Series

I wrote this article series in three parts over two months during early 2019 during a time of growth and acquisitions in the healthcare industry before the pandemic hit.

Articles in This Series

No matter how you slice it, acquisitions are about growth and therefore about sales. New products, new geography, more market power, new customers; it’s all about sales. So the decision to do a deal should be weighed explicitly against organic growth alternatives.
 
2. Growth Through Acquisitions: It’s Better in Vegas
While the role and end objectives of acquisitions and sales are essentially the same, the execution processes are quite different. This article explores the nuances.
 
All successful acquisitions are founded on one of two traits: a smart strategy or dumb luck. Making an acquisition that has an explicit role in your strategic plan will enable you to find a better target, ask better questions about it, make decisions more quickly and more logically and, hence, to increase your likelihood of deal success. 

Growth Through Acquisitions: It's Better in Vegas

By Will Stabler

First published on Feb. 22, 2019

We’ve looked a bit at the need to consider acquisitions in the broader context of organic growth, i.e., sales because growth is growth; it’s all one bucket. But while the role and end objectives of acquisitions and sales are essentially the same, the execution processes are quite different. 

Over the next few postings we will deal with the acquisition process including not just what to do but why each “what” is important. But why wait? Let’s get started right now.

The Number One Recommendation

Here is our first and foremost recommendation for investing in acquisitions:

Set a clear budget for your deal. Then take that amount of money, go to Vegas and put it all on red.

“Whoa, doggies! That’s the most irresponsible use of shareholders’ funds I ever heard of.”

No, not really. Truth is, the great majority of deals fail to do what they’re intended to do (a topic at which we will look another time). Hence red (or black) is a better bet.

“Hmmmm”

Unless…

… Unless you take concerted steps to turn the ugly acquisition odds more in your favor. Successful deals are indeed possible. IF you prepare and IF you follow through and IF you understand that acquiring is not the same as running. Acquiring is not rocket science but it’s not falling off a log either. It takes separate expertise, lots of time and significantly more money that just the purchase price; it takes investment in your investment.

We will look at the process over the next few weeks beginning with this question:

“Are you ready?”