Example:
Inxight acquires Information extraction technology nxight Software, a leading provider of software solutions for accessing and using unstructured data, announced that it has acquired the technology assets of WhizBang! Labs, of Provo, Utah. The strategic acquisition, the first following the company’s recent $22 million investment round, extends the company’s text analysis, classification and retrieval capabilities.
“This technology acquisition demonstrates our commitment to providing the most powerful solutions for accessing and understanding corporate data assets,” says John C. Laing, Inxight’s president and CEO.
“Combining the acquired functionality with our existing technology enables us to better serve customers, expand our market share and serve notice to the Unstructured
Data Management market that Inxight truly is determined to dominate.”
Source: https://wp-content-wire.com/taxonomies/index.cfm?ccs=82&cs=2328 Accessed 18th February 2006
Example:
The potential acquisitions are targeted on the basis that they should bring synergies to ComOps’ existing businesses, both in terms of cost savings and, more importantly, in revenue opportunities created by enhancing our product offerings to our already long list of quality clients together with new customers.
Source: https://www.comops.com.au/client_images/330102.pdf Accessed 22nd April 2008
Many acquisitions are made by corporations to acquire products which they are able to sell through their current distribution channels to their existing customers. Expanding the portfolio of products can be very cost effective as relationships with customers are already in place or their brand is already known. Creating differentiated products through an expanded solution set may be a very effective hedge to competition. Alternatively, adding complementary products may allow corporations to increase their penetration into existing market sectors.
Example:
South African industrial services group Bidvest (BVT) will continue to look for acquisitions in South Africa and abroad to expand its service offerings.
Executive Chairman Brian Joffe said on Monday that Bidvest remains acquisitive by nature and committed to expanding its distribution, services and trading strategy.
“Bidvest uses acquisitions not to achieve breakthrough, but rather to accelerate momentum. Finding the right acquisitions at the right price and at the right time requires skill and patience.”
Source: https://www.bday.co.za/bday/wp-content/direct/ accessed 7th September 2003
Example:
“This acquisition is a significant investment which reinforces and expands our emphasis in security related products,” said HPIC’s Chairman/CEO, Kim Kelley. “Keeper adds cargo management capabilities to our collection of branded, high value, easy-to-use security hardware and related accessory products for the home, vehicle and workplace. In the first year alone, Keeper’s sales will represent about one-third of Hampton’s overall sales.”
Source: https://www.theautochannel.com/news/2006/01/23/208192.html Accessed 18th February 2006
The selling firm may have access to a customer base where the buyer has none or little presence. This could be a new geographical area or a new sector.
Often firms buy their competitors for this reason. They can then switch the customer solution across to their own products providing economies of scale benefits as well as taking out a competitor.
This strategy is also used to increase coverage within a sector, especially for expansion overseas where the buyer will be acquiring a presence in a market and thus access local knowledge, local capability, a distribution channel and achieve critical mass. This strategy can be especially effective where the selling firm has a very large customer base but few products. A corporation which has a wide range of products which can be sold to an acquired customer base is effectively buying a readily developed channel to market.
Another form of expansion is to find a new mission for existing products by selling into a different sector where the product might be used differently. Often with this type of acquisition, the buyer is seeking to acquire knowledge of the sector. Every market has its own ways of doing business. Acquiring a firm, for example, which undertakes government contracts, would allow a firm to acquire deep knowledge of how to secure new business in that sector.
Example:
Lion Nathan’s $10 million acquisition of its third brewery in China earlier this month confirms its plans to expand in the world’s largest beer market despite $230 million of cumulative losses. The acquisition which will make Lion the largest brewer in the town of Changzhou.
Situated between Nanjing and its existing brewery in Wuxi, the Hua Xia brewery in Changzhou is Lion’s latest move in a strategy of expanding its foothold in the rich Yangtze River Delta region. It will not only give Lion access to some 22 million litres of capacity in the city, where the brewery markets the Linkman beer, but will make it easier to sell its other China brands in the region. The China business is on the look out for more acquisitions in the Yangtze River Delta.
Lion Nathan bought a brewery in Wuxi, 120km northeast of Shanghai in 1994 after a two-year search for an acquisition in China. Lion Nathan access to the biggest beer brand in the city, called Taihushui.
Lion Nathan is now looking for more acquisitions like the Changzhou deal which will give it access to more markets in the region. Buying a local brewery is as much about buying access to the local beer market which is often fiercely protected by local business and political interests.
Lion wants to continue to expand volumes and seek the market dominance that brings more control over pricing.
Source: The Australian, 31st December 2003, page 19, Great Creep Forward for Brewer, by Glenda Korporaal
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