Acquisition model for small privately held manufacturing businesses in the United Kingdom

Sammanfattning: Issue of study: The plastic injection moulding industry has become highly competitive in terms of lead times and pricing, following an increase in low-cost manufacturing from Asia, as a part of the full supply chain. To remain competitive, mould tool manufacturers are looking to complement new tool manufacturing with local after-sales services in countries where their mould tools are being used. Unless the mould tool manufacturer already has local after-sales services in the designated country or area, they need to either construct a facility focusing on after-sales services or acquire a company already specialized in aftersales activities. When searching for potential candidates to acquire, an acquisition model tailored around the industry needs to be developed. The model needs to be developed both in accordance to the prerequisites of the company looking to acquire, and the market in which it is looking to expand. Purpose: The purpose of this thesis is to develop an acquisition model specific to the plastic injection moulding industry. The acquisition model and M&A strategy will be developed for the case company Emikron Group and subsequently applied on the United Kingdom market to test its effectiveness in identifying qualified candidates for acquisition. Objective(s): The objectives involve: - To develop a model for candidate search & evaluation, as first phase of M&A. - Identifying what it takes to be competitive in the United Kingdom in terms of after-sales services. - Apply the developed model through identifying the critical success factors and needs of the case company. - Develop an acquisition strategy suitable for the Case. Methodology: By investigating existing models for the first stages of M&A on a new acquisition model is developed which is specifically tailored towards smaller companies within the plastic injection moulding industry. Using a case company for testing the model, the methodology will involve a highly quantitative and qualitative analysis of current operations. Finding suitable candidates that fit the existing acquisition plan in the United Kingdom will first be gathered using second hand information through search engines. The final candidates will be subjected to an on-site analysis where the authors visit the facilities and inspect the organizations personally. Conclusions: Applying the developed acquisition model on the case company yielded a successful result in compliance with the prerequisites set by Emikron Group. It is the authors’ opinion that this strategy can be applied to a variety of different industrial manufacturing industries apart from plastic injection moulding, as well as in different countries facing similar circumstances.