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PERRY LEWIS, ASPEN WAITE CORPORATE FINANCE
Building a World Class Business. You founded and put your heart and soul into getting the business off the ground. You’ve been through it all, the wins, the losses, the crises; and emerged in reasonable shape on the other side. You now want to build on your initial success. But how do you see the business in five-ten years time? How do you create real value in the business? Will you be able to extricate yourself from the business and realise the value you have built up though all of your hard work? In 1985 an accountant who served as finance director of a well-known advertising agency, teamed up with an investment banker to acquire a small, listed company making wire shopping baskets. This accountant had seen what the advertising agency could achieve through the acquisition of smaller advertising agencies.
He had seen first-hand the key ingredients of a successful acquisition strategy: talent and clients. Also how to create synergies through business integration and how to incentivise this talent. The accountant had seen that with access to a ready stream of capital, one could acquire smaller businesses and retain the talented ownermanagers through earn-out arrangements. So that much of the consideration paid for these businesses was based on how these individuals performed following acquisition. Of course, the accountant had little interest in the market for wire shopping baskets but was extremely interested in the ability of a listed company to tap into the financial markets for capital, this is what he did with enormous success. By 1989 he had acquired eighteen advertising agencies including industry giants J Walter Thompson and Ogilvy and Mather. These two agencies were acquired through a hostile takeover much to the irritation of a former CEO who famously called this accountant an “odious little s***”.
