Acquisition process

Acquisitions are a core part of Lagercrantz’s growth strategy. Our ambition is to maintain a high acquisition rate of about 5–8 new companies per year while we are selective with what companies we acquire.
 

Consistent Acquisition Strategy

Lagercrantz acquires B2B technology companies with tried-and-tested and long-term sustainablebusiness concepts which have a strong market position in their niches. They should also display a good, stable earnings capacity with limited risk and good growth potential. In other words – we impose strictrequirementsin relation to what companies we acquire.
  Generally, we make two types of acquisitions. Firstly, we look for new independent companies that are a good fit for one of our divisions, and secondly, we make supplementary acquisitions for our existing businesses. Our working method with acquisitions has evolved and has gradually been refined over several decades. We work in a thorough and long-term way and take great responsibility when we
interact with entrepreneurs and family business owners who are considering selling their life’s work.

 

Large selection of companies

In order to be able to acquire at least 5–8 high quality companies on an annual basis, many acquisition opportunities are required. These opportunities are mainly created in two ways: firstly, through our own proactive search efforts and secondly, through incoming prospectuses from employees, customers, business partners and corporate brokers.
  Every year, we establish contact with at least 100 companies that we think are interesting. We then maintain contact with many of them, which means that we have a watch list of a large number of companies that we continually follow. Furthermore, we have a well-established network of contacts with business partners and corporate brokers in the whole of Northern Europe that contact us regularly with prospectuses of businesses which are for sale.

 

Rigorous acquistion process

More than 30 years’ experience of successful acquisitions engenders respect. Our business mindset and tried-and-tested models ensure short, efficient decision-making processes and involves limited risks.
  After we have agreed on a valuation and have prepared a letter of intent with the seller, the due diligence work commences. Market and sustainability aspects are also analysed carefully in this phase. Concurrently, we often prepare a business plan for the company together with the management team to ensure that the company gets off to a good start in the Group.

 

Limited integration

When the acquisition is approved by Lagercrantz’s Board, the transaction can be completed and communicated externally. Our ownership model is based on small-scale operations on a large scale. This means that our companies work independently with a great deal of freedom, but subject to accountability. We further develop the company’s existing organisation, working methods and profile. Thus, the integration process is not particularly extensive, it largely consists of introducing the Group’s reporting routines. The work of supporting the management in order to develop the company begins immediately.

 

Active business development

By being a part of Lagercrantz, the company gets an owner which supports the management through active and committed board work. Furthermore, all companies in the Group are offered our different “tools” in order to reach their full potential. These tools include, among other things, an established infrastructure to use in international expansion, expertise in specific subject areas such as digitalisation, sales management and pricing issues, capital and inventory management as well as support with supplementary acquisitions.
  Last but not least, we stimulate a vigorous exchange of ideas and experience among all management teams in the Group. By highlighting good examples, rewarding performance and regularly bringing together the companies' key people, a collegial environment is developed that the companies both benefit from and enjoy.