Growth is accelerated by investing in value enhancing acquisitions.

Acquire

Clear business criteria have been established to guide the Group’s acquisition programme:

  • fit with the Group’s business model;
  • marketing led with strong customer relationships;
  • secure supply of high quality, differentiated products; and
  • capable management.

 


The principal financial criteria are:

  • Track record of stable, profitable growth and cash generation.
  • Exceed post-tax IRR threshold of 13% to ensure 20%+ pre‑tax return on investment.

Build

The acquisitions we make are of businesses that are already successful and with a good track record. However, these businesses have typically reached the point where additional resources are needed to take them to the next level of growth.

Working with management, we provide the investment required to build a solid foundation to allow the business to move to a new level of growth. The investment we make in new acquisitions will normally be in new facilities and IT systems, increased but better managed working capital and additional management resource.

Grow

Once the acquisition is integrated into the Group, with a solid platform established, the focus is on delivering stable, profitable growth.

The results of the Acquire, Build, Grow strategy can be seen in the improving revenue growth and operating margins post-acquisition.

 

 


Typically synergies come in the following areas:

Cross-selling between the businesses.

Joint purchasing between the businesses.

Shared back-office functions for finance and administration.

Acquire

How we have made progress

COAST

In October 2017, Clarendon Specialty Fasteners acquired the business and assets of Coast Fabrication Inc, a small specialty fastener distributor based in California, US. Coast has a strong reputation in US Motorsport which complements Clarendon’s strong Motorsport presence in Europe. Coast also provides a US base to expand Clarendon’s existing aircraft interiors business in this large market and allows Clarendon to access the major US fasteners suppliers. Revenues of Clarendon, including Coast, grew by 25% in 2018.

Read more in our Sector Review

Build

How we have made progress

ABACUS dx

Since being acquired in 2017, the business has been integrated with our existing DS business and has invested in expanded shared service facilities in Melbourne, Sydney and Brisbane, whilst cross-training technical and applications support personnel at both the global supplier and local level. As a result Abacus dx was able to sell and service over 90 diagnostic instrument placements in 2018 and benefit from the associated pull-through in consumable sales. Revenues of Abacus dx grew by 9% on a like-for-like basis in 2018.

Read more in our Sector Review

Grow

How we have made progress 

US INDUSTRIAL OEM SEALS

After clustering these businesses under a single senior management team, an ERP system was implemented in 2018 to replace a number of legacy systems. This will allow the management team to consolidate back-office processes to improve visibility of customer activity, inventory and supplier information, and finance. Each location will continue to maintain its own distinct identity, but the ERP system will allow the business to service customers using shared knowledge and products that will increase the value to the customer. Revenues of this business cluster grew by 13% in 2018.

Read more in our Sector Review