Business acquisition provides efficient access to commercial growth opportunities

New Zealand businesses looking to expand their market presence, activities and revenues, are increasingly looking at acquiring competitors or firms trading in the same market sector.

In these current times when there is limited access to skilled and qualified labour as a result of low immigration numbers and a tight domestic labour market, a lot of New Zealand firms are finding it challenging to grow organically and quickly.

So instead, growth-focused business owners are looking at buying their way into a bigger market share by acquiring rivals or other companies operating in the same sector. Acquisitions can substantially expedite a company’s growth plans.

It’s not just about bigger firms gobbling up smaller commercial entities operating in the same sector, but smaller firms buying their bigger competitors to deliver on their growth plans. Either scenario can lead to a rationalisation of operations to delivery greater efficiencies, access to a bigger geographical marketplace for services, and of course access to a bigger workforce.

Scenarios are evident in the tradie services sector, technology, hospitality, software, food manufacturing, and gaming sectors - where years of intensive research, product development knowledge, and intellectual property retained by employees can be secured in a much more compressed time frame through a buy-out programme.

In addition to the rationale for quickly building a skilled labour force through acquisition, there are six other main reasons New Zealand businesses will look to buy out their competition or firms operating in the same field of expertise. This set of dynamics includes:

- Improving the target company’s performance and revenue figures by implementing greater efficiency practices, or reducing overheads through rationalisation or restructuring based on the takeover company’s proven existing business model

- Consolidating market share by removing excess capacity from the industry

- Accelerating market access for either the target company’s products or the buyer company’s products through better access to customer networks, marketing, and sales skills

- Accessing industry-specific production scalability to deliver better economies of scale for either a target company or a buyer company

- Identifying a potential high performing business and mentoring or developing its people to entrepreneurial success

- Buying into the life cycle of a new industry or product line, long before other investors recognise that it is a business sector poised to grow significantly.

Call New Zealand Business Brokers now to discuss how we can assist you on achieving your business growth plans through acquisition. Or team of experts have extensive knowledge and experience in helping companies expand and prosper.