Partnership Prospecting & Acquisition

What Is Partnership Prospecting & Acquisition?

Before approaching a company regarding a possible partnership or acquisition, an enterprise must take several steps to ensure the target partner is truly the best fit. Wakefield Research’s Market Intelligence offering can play an important role in that pre-acquisition stage.

Wakefield researches a variety of markets to determine which companies provide the best opportunity for a target search. Subsequently, there are several ways research can optimize the pre-acquisition process, from mapping and prioritizing potential partners to identifying red flags.

Partnership Targeting Methodology & Research Steps

The process typically starts with the identification of companies within a key market that meet criteria related to size, capabilities and location, among other factors.

Following the identification phase, potential acquisition targets can be ranked in terms of attractiveness using a tailored methodology. The ranking is usually based on the scoring and weighting of metrics. For example, factors related to “number of product lines” may be weighted most heavily and “size of workforce” may be given least weighting.

A subsequent deep-dive into company activity is then performed to provide the key information needed to pursue a potential acquisition. The output at this stage often includes insights related to corporate developments, strategy and capabilities related to the company.

The steps in the research process typically include:

• Identify potential segments: A comprehensive screen of the industry value chain can identify areas of potential profitability. This phase also considers emerging applications, disruptive technologies, customer purchasing preferences, and the key sources of competitive advantage.

• Build a list of targets: Research into the segment will identify companies that can become sources of value, and an initial list of potential targets based on detailed screening criteria is created.

• Prioritize targets: The final step is to reduce the broad universe of companies to an actionable list of priority targets. A variety of factors will be considered to assist in ranking the targets.

Acquisition Research Case Study

An example project involves a company that was considering an acquisition of a components manufacturer. However, the company had limited understanding of the competitive landscape or which players would be the best fit for an acquisition.

This research was carried out in two stages. First, the landscape was scanned to determine which companies met the criteria for possible acquisition. Profiles of relevant targets provided insight into each company’s capabilities and strategic fit. The categories in the profile included:

• Company size
• Summary of company history
• Markets served
• Key sources of value creation
• Technologies
• Product offerings
• Service offerings
• Manufacturing capabilities
• Rationale for interest

The second phase of research ranked the top acquisition targets to provide insight into which company presented the best fit. The ranking was determined based on a variety of factors, each with specific weighting. That weighting incorporated the factors most significant to the client looking for the acquisition.

In this example the weighted factors in the ranking included:

• Markets served
• Company focus
• Revenue
• Priority product count
• Manufacturing capabilities
• High priority product count

Ultimately, the Market Intelligence research process is designed to adapt to any stage of the pre-acquisition process. Whether it’s the initial universe scan or a detailed examination of a target’s dynamics, Wakefield Research can partner with you at every step.

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