Buying a business which is performing exceptionally well; what’s the right approach?


Occasionally, if you’ve been in the M&A world for a while, you’ll find a real gem of a business which an acquirer has stumbled upon and bought. It’s a moment of joy as the opportunities which the combined entity offers start to accumulate and you, as the integration director, begin to realise that the real potential is even greater. 

These situations can be broadly put into two categories…


The ‘untapped’ group, where because of constraints related to previous ownership structures, market opportunities have not been exploited or products not given the amount of exposure they need to really move. 

A good example following the Boots acquisition by Alliance Unichem was an own brand product called ‘Protect and Perfect’ which was an affordable anti-wrinkle serum. In 2009, there were queues waiting to buy this as the combination of the incredible level of ‘trust’ as a brand value for Boots and the science created extraordinary demand. 

What very few people knew was that this was a product which had been in production for several years prior to this massive upsurge in demand. The focus from Alliance Unichem on making the most of what was an underrated but very efficient research and development capability (interestingly housed within the engineering part of Boots) had a direct impact on the re-launch and highly successful promotion of the product.

Following the acquisition by Bain Capital and T H Lee, a focus was made on sharing insights between 26 different countries operating independently in Clear Channel Outdoor.  They identified different pilots which could be rolled out across the group in areas such as revenue management (bundling, unbundling, discounting) and digitisation.

For an advertising technology business used by Facebook and Google, when a strategic review to carve-out a low growth processing activity identified a new commercial model structured according to client needs, which lead to three fold revenue growth in 12 months.


The second group is one where the combination of acquirer and acquired leads to extraordinary and critically, unplanned, outperformance. 


When OCBC bought ING Private Bank in Singapore at a significant premium to the other bidders, few in the market expected the exceptional outperformance which the combined business achieved. This was largely due to two factors, one planned and one which was extremely fortunate:

The planned one was a deliberate approach by the acquirer to minimise integration and maintain autonomy at ING PB, ensuring that key people retained their influence, client responsibilities and control, whilst maintaining good governance and direct control where it was required.

The fortunate decision came as a result of a branding conversation with regard to the new entity where the suggestion ‘Bank of Singapore’, an existing but largely dormant brand was put forward and accepted. The timing of this corresponded beautifully with a shift in private client wealth from the familiar European hubs to Asia…and the brand hit the mark well. 

What stands out in both cases? I think that the acquirer showed three characteristics which are relevant:

Agility and Flexibility. Neither Alliance Unichem or OCBC had any sense of the hidden potential in either product or brand prior to deal close…certainly neither featured in any integration playbook or business case as drawn up and presented to the board. 

Responsiveness and ‘Fit for Purpose’ governance. What OCBC and Alliance Unichem were able to do was change direction / strategic focus quickly and respond to the market opportunity. That required internal agility and a governance structure the enabled what are both large organisations to change.  

Limited fear of failure within the corporate culture. At the heart of both of those decisions was an individual or perhaps a very small team. The confidence to put forward that kind of change arises from a ‘no blame’ environment.

The challenge with M&A as stated many times before is the lack of knowledge of the target combined with the need for absolute certainty for the board. Whilst we may not be able to change the above two, we can certainly create the right environment for the above.

We often think in our specialist areas that there’s only one way to do things - driven by culture or legacy thinking. The solution lies in the willingness of both target and acquirer to be open and learn from each other.