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Change your mind-set and invest in top-line growth

Our Growth Generators invest in growth and they do so in bold and strategic ways. Half of the Growth Generators invest in top-line growth while fewer than a third of average companies make that commitment.

The investment starts with organic growth but the true Growth Generators are not satisfied with that. Two thirds of them see M&A as their number one strategic top-line growth priority. That’s not surprising, as Shaun O’Callaghan, our UK Head of Restructuring & Debt Advisory, explains, “M&A is the most effective way to deliver scale at speed.” And our Growth Generators are ambitious and willing to look outside the UK for M&A opportunities that can provide access to new markets and insights.

Who are the Growth Generators?

They made up 12 percent (119/1000) of our sample in our Planning for growth research. And they were close to 10 times more likely than low-to-no-growth businesses to achieve their growth targets.

Understanding integration after an M&A

Edwin Bessant, CEO of Ceuta Group underlines the success of this approach, ““We have undertaken seven acquisitions since we started up and investigated many others. It’s such an important part of our growth strategy. Supporting this initiative we’ve developed a standalone M&A team to focus on the commercial evaluations, implementation and construction of the deals.”

But the evidence is clear, not only do companies need to be making the right deals, they need to implement them properly. That means having a clear understanding of the scale of the task of integration after a merger or acquisition, especially the cultural integration. What sets the Growth Generators apart is that they recognise they are in the M&A business and need to invest in skills to make it work.

Research report
Planning for growth: don’t let uncertainty hold you back Discover the barriers and accelerators to private sector growth

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Consider all investment options and develop a business case

Growth is not just about doing deals. Growth Generators are more open to securing external investment to fund their development with nearly half of the firms surveyed having taken on some sort of external investment from banks or crowdsourcing.

But banks may not be able to meet all their needs and sometimes caution about other sources of funding and issues of control which can hold firms back. In particular, they need to change their mindset to accept that they may need to give up equity to secure the investment they need. Once they accept that David Ascott, a partner in our corporate finance team, says: “The reality is there’s no shortage of capital for interesting growth purposes. Private equity firms have a huge amount of funds they are looking to invest.” The challenge is for firms to develop business cases that can make them an attractive option for those deals.

What sets the Growth Generators apart is the way they think about the investment they need and how they could use it to drive top-line growth. They know who in the firm can manage M&A or where a specialist M&A team can help. They think about their purpose and how it should shape the M&A strategy. And they have worked out how much control and equity they are willing to give up if external investment is necessary for growth.

Critical features of Growth Generators are being open to external opportunities, a willingness to invest in them and the capability to make the deals work.

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