Ready Set Grow: Are you Ready to grow?

In this series of articles, we help you to really take off. The race abroad. Are you ready to take your business abroad or raise the money needed to grow and start your international adventure? Are you ‘Ready’ and ‘Set to grow’? Let us start at the beginning: “Ready?”

Are you an entrepreneur and do you have the ambition to expand your company by buying a company abroad? You are not the only one. In the past few years, we have seen an increase in the number of international parties that are involved in transactions; now about 70% of the deals that we close. The reasons why companies choose to expand abroad vary with each transaction. Growth ambitions, followed by growth potential are important reasons for this. By doing business abroad, you gain access to a completely new sales market for your products or services. An example of a successful foreign growth strategy is the acquisition of a Swiss company by the Amsterdam based video production company Wenneker Group. With the acquisition of a production company in Scandanavia, Wenneker Group was able to continue its ambitions abroad and launch its services in Northern Europe.

The choice of country to expand your business to is very important. There are several factors to take into account.

Firstly, it is relevant to look at local laws and regulations when it comes to buying and selling companies. Each country also has its own tax regulations. These regulations must be considered before a transaction is completed; this way you can make the acquisition a success.

It is crucial to have local market knowledge to decide the geographic region that matches your ambitions best. Where is the best sales market located, what is the size of this market and where are your competitors? To answer these questions, carrying out an extensive market and competitor analysis is highly recommended. Making agreements about the current management team is also very important; they are the ones with local market knowledge. Solid agreements and involving the team at an early stage can help make an acquisition successful.

Besides local market knowledge, it is also necessary to look into different countries’ cultures and values. People in different countries will interact differently with colleagues and with customers. This is when a buy-and-build strategy could be the way to go. By acquiring a foreign company, you also acquire that company’s knowledge and cultural awareness. For example, the company may already have an existing customer base, experienced account managers and personnel and hopefully a good accountant to ensure that the back office in the local market runs smoothly.

In recent years, we have seen the impact of macroeconomic developments reflected in our environment. Logistic chains were dealt a few serious blows by COVID-19, causing delayed delivery times for many products.

We also see that the unrest in Eastern Europe attributes to the rise in fuel prices and the shortages of products. Nevertheless, this can offer new possibilities for growth or optimisation. You can choose to have your acquisition be a diversification, you can acquire a foreign party in the logistic chain or bring a foreign investor aboard to secure the future of your company. Dutch company @Noord Nederlandse Draadindustrie, with the help of Marktlink, realised a pre-exit with a foreign investor to secure the continuity of the company.

We have been assisting entrepreneurs in the mid-market with their growth ambitions since 1996! We know the international market well and have a database of over 60,000 active buyers and sellers at our disposal, and we have many connections with different investment parties throughout Europe. Thanks to our active and prominent role within the Geneva Capital Group we can easily get in touch with foreign buyers and sellers, as well as gain access to local parties in the fiscal or legal services. You have come to the right place to meet the challenges of an international business acquisition, together with Marktlink.