Gofore is an international digital transformation consultancy with 1,500 experts, whose growth strategy is based on both organic and acquisitive growth. The Finnish-based listed company, which has grown profitably, has an impressive track record: it has successfully completed nine acquisitions in seven years, two of them in Germany. The company is still looking for growth through acquisitions in the DACH region.
Ville Hurnonen, Director of Mergers and Acquisitions, what digital transformation services does Gofore offer and what are the targets for service and customer growth in the DACH region?
We provide end-to-end digital transformation services to our clients in the smart industry and digital society. The company was founded more than 20 years ago in Finland; business in Germany started in 2016. Since then two acquisitions have been made in DACH, where we currently have 150 experts in x locations in Germany, Austria and Northern Italy.
In Intelligent Industry, we have a large, growing customer base in both Finland and German-speaking Europe, which we have been supporting with digital transformation services for a long time. We believe these learnings and experiences will also benefit our new customers in German-speaking Europe. For us it is of great interest to combine our current offering with further industrial digitalisation expertise from other IT experts through acquisitions.
In the Digital Society sector, Gofore is one of the leading players in Finland. We have identified a strong demand for digital society expertise and insight in the DACH market. We have some clients in this region already, but we see a lot of potential in combining our Nordic expertise with the capabilities of a local player through an acquisition. This will bring tremendous benefits to our international public sector client base.
What criteria are we using to find a new company to join the Gofore family?
There are three things: cultural fit, the pursuit of profitable growth and the company’s client portfolio and service offering.
How do we approach cultural issues?
Culture discovery starts from the very first meeting with a potential acquisition target. Research shows that the biggest challenges in mergers and acquisitions are typically related to cultural compatibility, so we focus on this carefully.
We spend time talking to founders and management, listening carefully to what they have to say. An open dialogue during the first meetings shows the direction in which a cooperation can go. Together we identify if the conditions for an acquisition are there, or if other forms of joint ventures are possible.
Gofore has always been a strongly value- and culture-driven company, and that is what we are looking for in DACH. We represent a modern Nordic work culture with a low hierarchy, a self-directed and agile way of working, transparency, appreciation of diversity and a human approach to people.
We have found that many companies in our industry in the DACH region share similar values to Gofore.
What do we think about growth and profitability?
Gofore is aiming for growth and profitability, which is what we are also looking for in the companies we acquire. We believe that companies that have managed to successfully combine growth and profitability also know what it takes to sustain it.
To ensure that the acquisition provides sufficient growth potential for both us and the company we are buying, we start by looking for companies of sufficient size – a few hundred employees – that are both growing and profitable, and where growth is also accelerating or continuing at a steady pace. On the other hand, a company with a sharper focus may be smaller, for example a community of a few dozen experts.
What kind of clients and service offerings are we interested in?
Our endeavour to acquire further large customers in the DACH region is prompting us to expand our portfolio through acquisitions. We are looking for companies with large, scalable customers who are interested in state-of-the-art expertise and methodology. Typically, this combination is found in companies with a minimum age of around 10 years. In M&A transactions, we emphasise large, long-term and growing client relationships.
The acquired company may also be a generalist in digital transformation or offer in-depth expertise that expands our knowledge in digital society or intelligent industry.
Our customer strategy enables our experts to participate in meaningful customer projects that have a lasting impact on society and companies.
Tell us about the integration process after an acquisition and how Gofore welcomes people?
An acquisition is often a very personal, difficult stage in the life of the vendor, and it can be a stressful process during the sales, transaction and integration period. As a buyer, we understand this, and we want to give both the management and the entire staff of the acquired company a gentle and safe hug.
There is not one way to integrate, therefore we proceed with each company individually. This may also mean that the company will continue to operate independently for some years after being acquired. We might identify significant and tangible synergies on both sides, which leads us to joining forces straight away, e.g. for creating sales or providing a wider range of digital services to our customers. Governance, such as IT systems and finance, will follow at the appropriate time.
The brand of a company is often an important part of its identity. Understandably, the question of what happens to the brand raises a lot of emotions. In this regard as well we make sure to always proceed together in a thoughtful and considered way.
How does cooperation with founders and management typically continue after an acquisition?
The acquired company has a great growth story of its own. Those companies are often at a transitional point and are looking for a new driver for future work and success. Gofore provides a strong shoulder to lean on, allowing the founders and management to continue to grow as part of a larger company.
We look forward to continuing to work with key members of the company. They have played a key role in the development and growth of their company, and we believe they also have the best vision for the future as the integration progresses.
What benefits can the employeed of the acquired company expect?
New and exciting projects as well as career opportunities will open up for the employees of the acquired company. To name an example, they will profit from our company’s success through a share savings program, which allows them to buy and own shares in our company for great conditions. More than half of our employees are currently invested in Gofore shares as part of our share savings program.
People are the heart of our consulting business. We want to do everything we can to ensure that being a part of Gofore is exciting, secure and enables a variety of new opportunities.
How will the clients of the acquired company benefit from being part of Gofore?
For clients, an acquisition is typically seen as a meaningful change. Customers benefit and gain added value from our broader range of services and experts to accelerate their digitalisation efforts. Customers also often value Gofore’s solid and international footprint.
Competition in the DACH region is fierce and requires a special approach from a Finnish-based company. How does Gofore stand out in the market in regard to acquisitions?
The German market is 10 to 15 times the size of our Finnish market, so accordingly the M&A market is also very large. We believe that our Nordic corporate culture and the growth and profitability of our company are differentiating factors for us that will attract the interest of those considering selling their business.
We offer founders, management and employees the opportunity to continue their personal growth and expansion of their digital skills with us. I have found that this opportunity interests and inspires many.
