A Navigare principal-led effort supported an already successful middle market firm to extend the Company’s reach into Europe through design and execution of a robust corporate development function capable of effectively managing complex, cross-border M&A transactions. Importantly, the Company was able to pursue – and capture – value-accretive growth opportunities without material disruption to the valuable underlying operations of their business. And while a Navigare principal played an integral role working shoulder-to-shoulder with executive management and ‘on-the-ground’ deal teams to design and execute the new M&A program, the Company continues to be a robust acquirer after the initial engagement with only limited Navigare support.
Situation and complication
A mid-Atlantic-headquartered, middle market data analytics company sought to successfully develop and extend its well-recognized capabilities by profitably expanding through highly accretive, cross-border expansion (in this case, to sustain and already enviable growth rate).
Already a leader in its relevant domestic market segments, the Company felt there was compelling logic to a growth strategy through establishment of a European beachhead for further expansion. A Navigare principal worked closely with the Company’s management to formulate and define a robust corporate development function – from opportunity identification to efficient initial evaluation and screening, from due diligence to deal structuring and negotiation, from post-merger integration planning to a prioritized 100-day plan implementation. Beyond the program design, the Navigare principal was hands-on in the execution across the entire corporate development process. This allowed key Company resources and staff to be used efficiently and effectively while maintaining the day-to-day core business functions of the company without undue interruption.
Following a detailed strategic assessment of the company overall, we were able to articulate an aligned M&A strategy that allowed the Company to effectively evaluate the customers, capabilities, and geographies that were most attractive for acquisition. The Company energetically launched the actively-engaged, strategy-linked approach corporate development process to search, screen, capture, and integrate three highly-attractive, highly-accretive assets within nine months. Though often complex, the strategy-focused, cross-border transactions brought immediate benefits to key stakeholders: from shareholders, to customers, to employees – and has allowed the Company to continue its profitable, value-accretive international expansion plans – both organically and through tuck-in follow-on M&A opportunities.
The success of the M&A program was derived from the exemplary execution across the most crucial elements of the M&A process, ever mindful of the Company’s core strategy and focused on meaningful, sustainable value creation:
- Value Identification – Although the Company had undertaken smaller, opportunistic domestic acquisitions historically, the new strategy-linked corporate development platform allowed the nationally-recognized company to seize opportunities to build out its capabilities, customers, and geographic reach years ahead of plan. Building on that success – and the dynamic needs of its customers – the Company’s strategic plan continues to lucidly envision further global expansion so the cross-border targets fit squarely into a fact-based, clearly-articulated acquisition strategy readily supported by debt and equity capital providers. The clear, compelling deal theses also allowed for expedited decision-making process and to effectively engage the acquired companies in strategic discussions early in the post-merger implementation planning.
- Value capture – Good companies are not necessarily good M&A investments – any successful strategic deal has to be struck at the right price and structured to preserve value for both Seller and Buyer (especially where the former will continue to be economic contributors post-close). In successful deals, from LOI discussions to deal structuring, from due diligence investigations to integration planning, the Company’s deal teams are able to focus on preserving the best of both entities through thoughtful alignment of economic interests, opportunities for upside participation, and careful attention to cultural and personnel considerations.
- Value realization – With integration planning appropriately starting before the deal was closed, the integration program gained immediate traction and showed all the earmarks of success from Day One. Clearly-defined, prioritized action items focused on key areas highlighted by the original deal thesis that preserved the deals’ fine balance between allowing the acquired asset room to grow and innovate while allowing the accretive revenue and cost synergies articulated in the deal model to be achieved well ahead of schedule.
The Company’s commitment to its continual development of integrated M&A capabilities allowed it to efficiently evaluate and successfully execute on opportunities directly in line with its corporate strategy. The rigor of the process – even in the face of complexities of a crossborder deal-making – allowed both acquirer and the acquired entities to over-achieve on desired strategic outcomes of customer-focused, profitable growth.