Ahlsell's successful strategy for profitable growth has laid the foundation for expansion within new customer segments, products and markets. Organic growth is supplemented with acquisitions and during 2016, three companies were acquired, with annual sales totalling approximately SEK 600 million.
Growing faster than the market demands innovation, creativity and other extra activities including strategic initiatives of all sizes to acquire new customers. Ahlsell works proactively to develop relationships with both new and existing customers. This includes expanding product range, developing new services and providing deeper specialist expertise.
Ahlsell is continously strengthening its market position through both large and small acquisitions. In the last 20 years, Ahlsell has acquired around 70 companies, including three in 2016.
Acquisitions can take place in existing markets within established product categories, and also within obvious niches in which clear synergies exist. Acquisitions contribute increased product breadth, new customer segments and markets and, not least, new expertise and new employees.
Positive synergy effects
Ahlsell has considerable experience from identifying, acquiring and integrating companies. There are significant integration benefits and Ahlsell expects that the acquisition object's EBITA margin can be doubled in a long-term perspective, due to the synergy gains achieved from coordinating purchasing, logistics, administration and sales. There are additional positive effects from a reduction of the operating capital requirement in the acquired company, including the coordination of stocks.
A structured process
Ahlsell has determined that there are a large number of potential acquisition candidates in the Nordic region. These are considered using a structured process through which a central acquisition function, supported by the Group management and local managers, assesses potential acquisition targets. Through an ongoing and meticulous search process Ahlsell has identified around 100 companies to put through closer scrutiny. Ahlsell will contact the most interesting in order to initiate dialogue. Certain ventures can take many years before reaching completion, while others proceed more quickly.
Four types of acquisitions
Ahlsell has divided acquisitions into four categories: supplementary acquisitions that are fully integrated into the company, major strategic acquisitions that contribute a new customer segment or geographies, acquisitions to broaden the product range, and niche acquisitions. In recent years, Ahlsell has made acquisitions in all four of these categories.