Gofore’s growth strategy is equally based on organic growth and growth by acquisitions. We also have an impressive near-term history in M&A; with the latest eMundo deal, eight successful acquisitions in five years.
Gofore’s M&A Director Ville Hurnonen, what’s your take on the M&A field at the moment?
– The field is very happening; we continuously get propositions from companies on sale. As our market position is strong in Finland, our interest is mainly in Germany, where we already have a team and where growth requires more M&A activity. I think our attitude towards acquisitions in Germany and overall is the right combination of bold and conservative.
What kind of special features are there in the German M&A market?
– Firstly, Germany is an enormous market, 10-15 times the size of the Finnish market, which translates into a very vast M&A market. As we are a fairly unknown buyer there, unlike in Finland, the probing takes a different kind of process; lots of discussion and filtering the acquisition potential out of a big mass, with the help of an advisor of course.
What kind of acquisition are we looking for?
– The services should either support our existing capabilities, or expand them, such as with the Devecto acquisition we closed last January that brought us completely new aspects of the intelligent industry, or the eMundo deal which gives us more “muscle” in the DACH area. Naturally the market’s maturity stage may affect the scouting of acquisition targets.
To have enough growth factor in the acquisition, we primarily look for adequate size companies that are both growing and profitable, and whose growth is either accelerating or is showing enough promise of consistently continuing. The key to us, however, is the culture match; an impression of the people representing the company, based on the smallest of things.
What, on the other hand, is undesirable in a target company?
– In this too, the culture and the feeling between people counts most; even if other criteria would be met, unless our thoughts and values meet, we do not take the process forward. Correspondingly to us looking for certain types of capabilities and customer portfolios, growth and profitability, we are not interested in companies whose hopes are for the buyer to fix one or all of these areas, let alone targets that need actual restructuring.
Your job is also to carry out the integration for some three years post acquisition. How would you characterize this important phase; what kind of principals do we have there?
– For the sellers, and acquisition is often a very personal, even difficult milestone in their lives, and it is laborious and stressful long-term in both the sales, the transaction, and the integration phase. We as buyers understand this and want to embrace both the entrepreneurs of the acquisition target and the entire staff in a gentle but firm hug.
We welcome every company and especially the people in a unique way. There is no template for the integration, where all acquisition targets would be forced into the same mold and schedule, although we do of course always carry out certain Group integrations such as joining some of our systems. We strive to enable growth, seek added value for customers and synergy in sales, offer new project and career prospects for experts, and offer the new community our Group services, best practices, incentives and communality.
The firm part of the hug naturally includes an expectation of the desired growth and profitability, and we of course further this in every way for the common good. Above all, we feel that growth and profitability follow, when people feel good and are motivated.