The Group's "Acquire, Build, Grow" strategy is designed to deliver strong, double-digit growth.

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.
  • Capable management

 


The principal financial criteria are:

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

Build

Acquisitions are intended to give entry into new but related markets and thereby extend the reach of the existing businesses and bring new growth opportunities.

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

Grow

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

Except in the case of smaller, bolt-on acquisitions, the acquisitions will maintain their distinct sales and marketing identity and strong independent management teams. However, where there are opportunities for synergies with other Group businesses, these will be managed within larger business clusters.

 


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

Abacus

In April 2017, the DHG group acquired Abacus, a long established supplier of specialised diagnostic instrumentation and consumables in Australia and New Zealand. Abacus has a good fit with our existing DS business, adds attractive product lines, critical mass and economies of scale in Clinical Diagnostics and gives entry to new segments within the broader Healthcare and Life Sciences sectors.

Read more in our Sector Review

Build

How we have made progress

 US Industrial OEM Seals

In the second half of this year, a senior leadership team was established to manage the cluster of Industrial OEM Seals businesses in the US. While maintaining the distinct identities of the businesses and close local contact with the customers, key functions including Sales, Supply chain, Technical and Finance will be managed centrally by this team. Investment will also be made in implementing a new ERP system to replace the disparate legacy IT systems.

Read more in our Sector Review

Grow

How we have made progress 

Cablecraft

Cablecraft, in only its second year as part of the Group, is already showing the benefits of investments made post-acquisition in increasing management and sales resources, expanding e-commerce capabilities and refurbishing facilities. Under the continued strong leadership of one of the former owners, Cablecraft has increased revenues in 2017 by 7% on a like-for-like basis and has improved operating margins by ca. 300bps.

Read more in our Sector Review