The role of acquisitions in company growth
Aims
The aim of the research was to understand the role acquisition can play in the growth of Scottish companies. The research had the following objectives: to provide a comprehensive overview of the acquisitions market within Scotland over the past decade; to consider the role and impact of acquisitions on company growth; to highlight the impact of acquisitions on the Scottish economy; and to provide insights into the acquisitions market to help inform Scottish Enterprise’s policies and practices (as well as that of others).
Methods
The research was carried out in two stages, combining quantitative analysis of data with qualitative research in the form of interviews. Quantitative analysis was undertaken by using the ZEPHYR database which compiles data on completed deals. Analysis of deals spanning a ten year period from 2003 through 2012 was carried out for Scotland and a comparator sample of European nations. This was complemented by a series of interviews with randomly selected Scottish Enterprise Account Managed Companies who had gone through either a sale and/or an acquisition over the same period. This was to provide examples of how Scottish companies have used acquisitions as part of company growth.
Findings
An acquisition remains a rare avenue for company growth, and data demonstrates that Scottish companies are less likely to buy other companies, or be bought, than those in other comparable countries. Scottish companies are also less likely to be involved in international acquisition activity. For companies that are acquired, the level of activity that remains in Scotland post acquisition is influenced by the degree to which it is embedded in the economy. Company motivations for pursuing acquisition as a growth model include: securing investment, accessing skills and knowledge, expanding products and services ranges, quicker entry to new markets and being able to compete for larger contracts. Acquisition activity can therefore be an important trigger for sustained company growth.
Recommendations
No recommendations were made.
| Document | |
|---|---|
| Author | Scottish Enterprise |
| Published Year | 2014 |
| Report Type | Research |
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