FBA National Conference
Darwin 2009
The Dyson Group
Growth By Acquisition – Lessons Learnt
Ed Paton - Partner
Annie Stevens - CFO
Michael Sewards - Director
Dyson’s Acquisition Story
today:
1.
A short walk through Dyson’s acquisition history
2.
An open communication strategy
3.
Making Due Diligence work
4.
Get to know what you are buying
5.
Important issues affecting price
6.
Transition
Annie Stevens
1. A short walk through Dyson’s acquisition history…
•
Historically very informal approach
- much by instinct
- but using solid industry knowledge and experience
•
Recent years a more structured approach
- use of planning, process and procedural tools
- some examples…
Target List: who, when, why, size
Project Plan: team, responsibilities, tasks, when by
DD Plan: more about that later
Annie Stevens
…some context
•
Early 90’s
→ Turnover approx $15M
→ Buses = 70
•
In 2009 (incl JV’s)
→ Turnover $115M
→ Buses = 480
→ Employees = 950
•
In 2009 (Dyson’s main trading entity)
→ Turnover $86M
→ Buses = 380
→ Employees = 725
Annie Stevens
…some context
160
140
120
QTY B US E S
QTY DE P OT
QTY P E OP LE
100
80
60
40
20
0
Annie Stevens
C oy A
C oy B
C oy C
C oy D
C oy E
C oy F
New Depot
C oy G
C oy H
C oy I
1990
1997
Aug-03
J an-04
Aug-04
Mar-06
J un-06
J ul-07
J ul-08
J ul-08
160
140
…new phase
120
QTY B US E S
QTY DE P OT
QTY P E OP L E
100
80
60
40
20
0
Annie Stevens
C oy A
C oy B
C oy C
C oy D
C oy E
C oy F
New Depot
C oy G
C oy H
C oy I
1990
1997
A ug-03
J an-04
A ug-04
Mar-06
J un-06
J ul-07
J ul-08
J ul-08
2. An open communication strategy
•
•
•
•
•
•
Keeping communication channels open between buyer and seller
Establishing one-on-one relationship with key player from vendor
side
Building collaboration with advisors (if they are involved)
Building relationships between buyer and seller teams (internal staff
and external advisors or family)
Being willing to listen and learn
Keep key decision makers informed along the way
e.g. Family Council
This strategy sets up a good basis for transition if the sale is successful
Annie Stevens
3. Due Diligence
• Imperative - a non-negotiable really
• Build in this process early on and be comprehensive
- potentially can start straight away (e.g. a Purchase by Tender)
- needs to cover Financial, Marketing, Operational & People
•
•
•
•
Have realistic time frames
Be transparent
Document formally…..
…. but integrate informal and collaborative approaches
to get the job done effectively
Annie Stevens
4. Get to know what you are buying
• Are you buying the business (assets) or the company?
• Finding out exactly what you are getting and what you
are not getting in the potential sale…
…sounds fundamental but it affects price, terms,
transition and integration
• Repercussions if you don’t!!
Annie Stevens
5. Important issues affecting price
• Valuation approach and getting it right (or at least close!!)
• Having the most accurate estimate of a company’s true worth
gives a solid base to work from, before entering negotiations
“It’s far better to buy a wonderful company at a fair price than a fair
company at a wonderful price.”
- Warren Buffett
Annie Stevens
5. Important issues affecting price…
•
Have market knowledge about price trends, multiples
- but trends are not a benchmark!!
•
Tax v. accounting issues - personal assets/shareholder loans
•
Vendor expectations
- too far along and maybe too far to back-peddle on important issues
•
Discounts and whether they may/may not be relevant or be an
expectation
•
Communicate your ability to complete the deal
•
Have your ‘walk-away’ price
Annie Stevens
6. Transition
An acquisition is not complete on settlement day!
 People side is critical
 Face-to-face approach
 Read & understand their culture; helps with integration approach
 Identify the non-negotiables v. the not-so-criticals
 Identify the culture symbols that will assist integration
Annie Stevens
6. Transition (cont.)
 Needs to be planned and communicated early and be two-way
 Needs to be formal plan for pre and post acquisition
 Aim for the process to be based on building trust and openness
 Walk in as you will operate
 Review and debrief after the dust has settled – how did we do &
what does the future look like now
A successful integration adds to the bottom line
Annie Stevens
To sum up…
The themes that have worked for Dyson’s during
their acquisition journeys have included:





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Open communication
Increased rigour with processes such as Due Diligence
Understanding of critical external factors
Staying close to the action
Giving people issues top priority
On-going review of performance
Annie Stevens
Ed Paton - Partner
Michael Sewards - Director
Questions……….
Annie Stevens - CFO