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.