5 benefits from a successful acquisition

What are the benefits of an acquisition?

As a means for growth, acquisition has many benefits.

1. Speed

Compared to organic growth, acquisition is a fast way to scale up a business. You have instant access to new resources and competencies that your business alone may be lacking. And the new product lines, new markets, and new customers are yours right away.

The acquiring company stands to benefit from an existing reputation and long-standing customer base. Compared to the organic growth of a new business, this is highly beneficial in terms of rapid growth.

2. Expense

Acquisition is a relatively inexpensive way to achieve growth. The existence of everything from talent to production to logistics enables speedy growth, but it also saves money.

Add to that the savings available as a result of new efficiencies. With one marketing budget, one delivery setup and one management team, there are savings to be made in almost every area of the business. Also, as a more large-scale enterprise, the acquirer will benefit from improved purchasing power and scalability.

3. Less risky

With no new products to develop, or new markets to try out and potentially fail in, acquisition is a less risky way for businesses to achieve growth. Plus, with added diversity in the portfolio, the company will be better prepared to weather those more tricky trading periods.

4. Competition

By increasing market share through acquisition, some businesses may be able to outrun their competitors entirely. At the very least, competitors will be caught off-guard and forced to reassess their strategy. An acquisition can improve the reputation and value of a business within the market thanks to their increased portfolio, size and power.

5. Assets

Along with the acquisition of a new company comes new team members, bringing with them years of expertise in their field. Senior executives would be wise to make the most of the huge increase in skills, knowledge and insider intelligence from the acquired company post-merger.

As well as funds, acquisitions open the door to new facilities and technology which can be factored into decision-making for future business growth.