Mergers and acquisitions are happening all the time, but not every successful merger or acquisition hits the headlines. They can take place for many reasons, and the most common reasons include: value creation, diversification, technology acquisition, asset acquisition, increase of financial capacity, tax purposes, gain market share, elimination of competition, and many more.
Below are some examples of some successful mergers and acquisitions, conducted for various reasons, that you might not have heard of:
Berkshire Partners’ Acquisition of Portillo’s
In 2014, Berkshire Partners, an American Private Equity Group, acquired Portillo’s Restaurant Group. Portillo’s is an iconic fast-casual restaurant chain serving Chicago-style food, based out of the Chicago area. Berkshire planned to work closely with Dick Portillo, Founder of Portillo’s, to support the future growth of the company. Portillo’s currently has grown to 38 locations in multiple states.
Berkshire seeks out strong businesses with attractive growth prospects, like Portillo’s, and applies a collaborative approach with the ownership to realize the full potential of the business. Berkshire Partners represent a financial buyer, who can be characterized as long-term investors interested in the return they can receive by buying a well-managed business.
Matot’s Acquisition of Kelair Dampers
In 2017, Matot, a manufacturer of dumbwaiters, acquired Kelair Products, a manufacturer of industrial dampers. Matot is a family owned, niche manufacturer that has been in operation since 1888. The ownership of Matot made the decision to attempt the company’s first acquisition to continue the long success of the business.
Matot engaged with a merger and acquisition firm in a buy-side search to diversify its manufacturing services. A merger and acquisition firm conducts a targeted search and provides proprietary deal flow to meet a company’s acquisition goals.
Cisco’s Acquisition of MindMeld
In 2017, Cisco completed its acquisition of MindMeld, a privately-held artificial intelligence (AI) company based in San Francisco, CA. MindMeld brings to Cisco a unique AI platform that is used for conversational solutions, which will enable Cisco to deliver a new groundbreaking technology throughout its substantial portfolio.
Cisco believed that AI and machine learning technology would play a crucial role across their platforms in the present and future. An acquisition can serve as the fastest and most effective way to add significant technology which a company may be lacking.
What Each Successful Transaction Has Common
Whether it’s purchasing a new business to operate independently as was the case for Berkshire Partners’ acquisition of Portillo’s Restaurant Group or acquiring and integrating another firm to diversify product offerings as with Matot, a successful M&A transaction may look different depending on the goals of each party. What does set these transactions apart from other transactions occurring at the same time is the involvement of an experienced mergers and acquisitions firm, guiding the process and creating additional value for their represented party.
If you’re exploring the opportunity of buying a business to operate or as an investment, or considering selling your current business, request a free consultation from one of our experienced M&A advisors today.
If you’re looking to sell all or a portion of your business, determining an accurate market value is key for selling a company. You may have checked an online business value calculator which pulls in simple data such as earnings, member compensation, growth, risk, and discount rate and churned out a number that feels right, yet it misses the mark with regard to market position, operational and process efficiency, assets and liabilities, and future opportunity. A simple calculation like this could either dramatically inflate or deflate the value of a business. Let’s dig into a few areas of consideration calculators often miss, which a business valuation expert will capture.