Some time ago I was asked: “What if a big company offered to buy MICROingranaggi?”. “If only!” I replied. Joking aside, we are not looking for anyone to buy us out. What’s certain is that, if that happened, we would assess it.
Today I would like to ask you the same question:
these days is it advantageous to be bought out by a larger company? Deep down I would say yes. I think that after all, becoming part of a larger group can only be an improvement. Do you agree?
Follow my reasoning. Most Italian companies are small to medium in size, a factor that – in several respects – carries with it a number of limitations; so it was in the past, it is now and will be even more so in future. It is of course not possible to generalize and, depending on the situation, various evaluations would need to be made.
One advantage of being part of a group, for example, is being able to lower your operating costs. Those of the administrative office, for example. A company of thirty people who become part of a larger company or of a group will almost certainly be able to benefit from an already existing administration department, thus being able to eliminate their own as it would in fact entail duplication. And the same would happen for the sales division, whose agents could certainly be optimized.
Or again, think of the marketing initiatives and the trade fairs, for example. An SME can afford to present, on average, at a couple of trade fairs a year (somewhat similar to our attendance); a larger company (of 5000 employees for example) will most probably be able to take part in around fifteen events. And the 15 trade fairs at which to display your products instead of two will undoubtedly mean having much greater exposure.
Not to mention the matter of image. Being part of a group also means presenting in a different way, perhaps with the name of a company that is larger and more structured that, on those points alone, confer an image of the highest level, one that is able to offer greater guarantees.
Having said that,
to the question “it is advantageous to be absorbed by a larger company?” it is not possible to give a singular and absolute response; each company would need to assess the conditions of circumstances and acquisition.
Let’s again consider the case of MICROingranaggi. For a company such as ours, which now works across a number of different industrial sectors, being absorbed by a company that operates in one only and for which we would invest 100% of our time and resources could be a problem, resulting in a slowdown in growth. But there are several alternatives, also because conditions such as these, as well as being counter-productive for the company being absorbed, can also be detrimental for the purchaser.
Some time ago I met at a trade fair the owner of an Italian company specializing in the production of numerical control machines who, at one point, was due to absorb a historic supplier. To prevent the newly acquired company from relaxing its operations and, consequently, from lowering the quality of production, the parent company established a condition as part of the agreement being entered into. The newly acquired company would need to work with other customers to achieve at least 40% of its turnover.
Moral: if the preconditions are in place, being part of a larger group means, to a certain extent, revisiting the concept of being part of a network of companies, a notion we discussed some time ago and that, in my opinion, could bring benefits not only for the individual company involved but also probably for the economy of our country… Do you agree?
