Three essential inquiries that a company founder ought to address prior to departure, as recommended by a Mergers and Acquisitions (M&A) consultant
In an unprecedented move for the beverage industry, the Radeberger Group, a subsidiary of Dr. Oetker, acquired Flaschenpost, a beverage delivery service, for over one billion euros in 2020. This acquisition was unusual from an industry perspective but brilliant from a market perspective.
Strategic buyers often focus on synergies within their own industry, leading to less independence, short earn-out phases, and little cultural fit. However, Radeberger Group's acquisition of Flaschenpost demonstrated the value of a platform-based approach, offering access to new markets, expertise, and the future of the beverage market.
Flaschenpost, which did not produce its own products but delivered them, was the vehicle for Radeberger's expansion into the digital age. The company boasted a direct customer interface, its own digital infrastructure, and real-time data on consumption behavior, making it an attractive proposition for a corporation seeking to understand and tap into the future of the beverage market.
Christian Saxenhammer, the founder of M&A boutique Saxenhammer, has advised over 400 transactions and has seen firsthand the benefits of considering strategic buyers outside of the same industry. Such buyers can bring unique technologies, processes, or customer bases that complement a business, leading to innovative solutions and improved competitiveness.
For founders, it's essential to consider the potential worth of their company outside of their known playing field. Many underestimate the value their company could bring to a corporation that understands the value in the platform, not just the product. In the case of Flaschenpost, Dr. Oetker preferred to buy the service rather than brewing more beer, indicating a shift in acquisition strategies.
The acquisition of Flaschenpost by Radeberger Group was not typical for a beverage company. It serves as a reminder that M&A doesn't just mean growing bigger, but combining differently. The perfect buyer for a company is often someone who can do something with it that the seller hasn't done yet. In this instance, the best buyer for Flaschenpost was a corporation that thought bigger and differently than the seller, offering long-term strategic alignment and the potential for mutual growth.
However, it's important to note that cultural and operational integration challenges can arise when merging companies from different industries. Therefore, careful planning and alignment are crucial to ensure successful integration. Despite these challenges, the acquisition of Flaschenpost by Radeberger Group demonstrates the potential benefits of considering strategic buyers outside of the same industry.
What industries might offer unique technologies, processes, or customer bases that could complement the beverage business?Christian Saxenhammer, the founder of M&A boutique Saxenhammer, has advised that strategic buyers outside the same industry can bring such benefits.
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