Page 8 - SONEPAR 2021 - AcquisitionBook

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PHASE 1: STRATEGIC ANALYSIS
Align local acquisition strategy with the GROUP
The strategic analysis is the very first step of an acquisition process.
1.1 ALIGN LOCAL ACQUISITION STRATEGY WITH THE GROUP No acquisition process may be initiated without a prior analysis of the country’s development strategy. The GROUP acquisition
strategy is presented in the Impact Plan. Countries shall ask themselves the right questions, such as:
➜ what are the talents needed?
➜ do we have the financial capacities?
➜ are there any other investment priorities?
➜ are there sufficient synergies with existing SONEPAR businesses?
➜ what are the respective market shares of the main players? ➜ are there potential regulatory/antitrust concerns?
➜ do we have the adequate integration capacities?
It is important to look at our competitors’ strategic intentions but also to thoroughly analyze the risks of not doing acquisitions.
Each target shall be qualified according to one of the following acquisitions strategies:
Category General Guidelines
PLATFORM • Sales > €200m • White spot
• High performer with strong local/regional position • Cultural fit with SONEPAR
• Capable to be a local/regional consolidator
DENSITY • Sales < €200m
• Geographic fit with existing “Platform”
• Plan and capacity to fully integrate quickly • ROCE >15% by year 3
SPECIALIST • High capabilities acquisition (product, service, digital)
1.2 IDENTIFY AND SCREEN POTENTIAL TARGETS
Once a clear external growth strategy has been determined, countries shall perform a strategic screening and build an acquisition list according to the following criteria:
➜ geographic criteria;
➜ product or customer criteria;
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➜ size criteria;
➜ profitability criteria.
This acquisition list must be regularly updated. It must be presented to the HQ and validated by the GROUP CEO every year as part of the Impact Plan update.
HOW TO IDENTIFY POTENTIAL TARGET COMPANIES?
➜ Through our OPCOS who know their competitors (Key Managers down to Branch Managers);
➜ Through our suppliers who may wish to strengthen an existing distributor of theirs or ensure a succession plan;
➜ Through our acquisition processes, when we gather information on competitors;
➜ From our market analysis, done at country level or by SIS team;
➜ From investment banks and M&A boutiques that may approach us or that we may retain (see below).
RELATED COMPLENTARY
UNRELATED
IDENTIFIED
RELATED SUPPLEMENTORY
6 SONEPAR - ACQUISITION MANUAL - 2021 - FOR INTERNAL USE ONLY
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