【Client Situation & Background】 First Full-Scale M&A Vision to Strengthen Growth Drivers
Leading the process from target definition to initial contact with no prior M&A experience within the company.
An IT service company was seeking a second engine for growth and urgently needed to acquire capabilities in specific business areas from external sources. Particularly, the limits of existing extensions were becoming apparent for accelerating solution development for mid-sized to large enterprises.
The key to business growth lay in “securing specialized personnel.” However, chronic difficulties in recruitment in this field made in-house acquisition virtually impossible. Therefore, the management team chose M&A as a complementary solution. However, the company had no experience in M&A execution, and the entire process of candidate exploration, strategy formulation, and internal engagement was a “blank slate.” It was at this point that they approached P&E.
【P&E's Approach】 From Problem Setting to Creating Execution Touchpoints with Candidate Companies
Our first task was to define the target: “What kind of company do they want to acquire?” Together, we articulated their “ideal state” by thoroughly analyzing the required (complementary) specialized personnel requirements, service areas and content to be provided, customer segments, and organizational culture.
From there, we initiated a proactive search for candidates, not just waiting for opportunities. In addition to scrutinizing quantitative information (e.g., business performance, company size, number of personnel, certified professionals), P&E leveraged its expertise in qualitative information (unraveling the company’s environment, management’s aspirations, and business policies from mid-term plans, IR materials, and management interviews) to create a “tangible short-list” with high feasibility.
Furthermore, simply stating “we want to buy” would not suffice. Therefore, we designed a proposal story for each candidate company. “Why now, with your company?” and “What kind of future can we envision?” – We meticulously designed the initial contact by crafting messages that resonated with the candidate companies.
Clarified the ideal partner profile desired by the candidate company's management/owners based on thorough individual company analysis, enabling our client to approach the target candidate company for M&A.
Developed scenarios for our client to propose a growth story with the target candidate company during discussions and presentations.
【Outcomes & Changes】 Advancing Decision-Making and Tangible Progress
The significance of this project lay not only in creating execution touchpoints with target candidates but also in supporting the evolution of the internal decision-making process itself.
By having the M&A-inexperienced client actively participate in evaluating candidate companies, internal understanding and enthusiasm steadily grew. The strategy, which initially seemed like a “pipe dream,” gradually gained realism.
We received gratifying feedback such as, “We established contact with a company we absolutely couldn’t have reached otherwise, through both logic and empathy,” and “Among all the consulting support we’ve received, P&E was the most trustworthy partner.”
Three Things Only P&E Could Achieve
- Candidate Search Beyond “High-Level Discussions”： Designed a short-list that balanced strategy and reality.
- Designing Individual Motivation Stories： Articulated proposals by empathizing with the other party’s management challenges.
- Supporting In-house Decision-Making Process： Fostered conviction not only among top management but also at the middle management level.
