Meet the world’s most acquisitive corporations
Like most industries, there are lots of meaningless league tables in the world of business sales. But a quick analysis of the world's most acquisitive firms in 2018 gives business owners real insights to understand the wider business trends driving acquisition activity.
Here's a brief look at a few highlights from the accompanying chart.
Chicago-based insurance colossus Hub International continued its acquisition blitz this year with the addition of 26 North American insurance brokerages, taking its total tally to more than 500 takeovers in 20 years.
Formed from the 1998 merger of 11 Canadian brokerages, Hub is one of the world’s most experienced acquirers, and a top 10 player in the global insurance industry. Hub has been private equity backed since 2007.
ARTHUR J GALLAGHER
With heavy insurance brokerage consolidation, it's no surprise to see Arthur J Gallagher (AJG) complete another 24 acquisitions in 2018. AJG has acquired 450 brokerages and consultancies since 2002, and now has operations in 33 countries.
As CEO Pat Gallagher said in an interview last year: "The key for us, and 99% of our due diligence, is: is there a cultural DNA match? That's the secret sauce. We don't get it wrong very often."
Back in 2002, Luxembourg-based laboratory testing group Eurofins built a unified IT platform, so all its businesses could increase sales and take advantage of cutting edge logistics. This unique infrastructure is a powerful incentive for specialist CRO labs to sell to Eurofins, helping the listed group make 14 acquisitions in 2018 – 11 in Europe, two in the US, and one in Asia.
Accenture has morphed from a management consultant into a broad-based consultancy with a comprehensive offering in marketing and IT. Since 2009, the Dublin-headquartered, New York-listed firm has acquired 20 marketing agencies covering every discipline imaginable. This year's clutch of deals is more varied, from big data analytics to cloud services, and from visual content specialists in New York to full service agencies in Shanghai.
Some highly acquisitive businesses are missing from this year's global top 20. Global distribution logistics group Bunzl added five more companies to its 150 acquisitions since 2004, while Swedish engineering conglomerate Indutrade – made up of more than 400 acquisitions – has acquired four European businesses in the first nine months of 2018. Finally, global ad agency WPP has been far quieter than usual – making just one acquisition – as its new CEO settles in.
This shows the importance of advisors maintaining constant contact with potential buyers, as acquisition appetite, focus and criteria change all the time.
WHY THIS MATTERS
While many SME owners dream of selling up one day to a multinational leader in their industry, the vast majority will end up being sold to a buyer with a lower profile. The 20 most acquisitive corporations in the world right now snapped up 224 firms between them out of 40,000 businesses sold in the first nine months of 2018. That means that selling a business to a small list of the 'usual suspects' is unlikely to generate enough traction for multiple offers, and therefore maximum value.
- Negotiating with the big boys is hard. When choosing an advisor, check their pedigree of selling businesses to serial acquirers and multinationals.
- Serial acquirers are evident in almost all industries, but they are the usual suspects. Owner-managers typically need several offers to ensure maximum value, and that needs a global approach and approaching buyers outside the core industry.
Discover more about acquisitions with BCMS
BCMS has sold client businesses to many of the serial acquirers listed above, along with others who are first time acquirers.