Acquisitions have been a key component of the Group’s growth strategy for many years and, as illustrated below, deploying capital for acquisitions is one of the five main elements of the Group’s current strategy.
Since 2008 we have invested around £730 million on 34 acquisitions across all business segments and geographies.
What type of business does Spectris acquire?
- Our businesses all help their customers improve productivity
- Spectris typically acquires leading businesses with world-class differentiated technology and strong market positions. The technology in companies we acquire is often backed by patent protection.
- We acquire hardware, software and services businesses across the breadth of our group
- We acquire businesses that either are market leaders in their own right, or as an addition to one of our existing operating companies can create a leadership position, or have the ability to disrupt the status quo of established competitors
- We look for high growth and market traction
- We are relatively agnostic on location; many of our businesses have global operations
How do acquired businesses fit into Spectris' portfolio?
We acquire businesses either as:
- Standalone or platform acquisitions which broaden Spectris’ portfolio
- “Bolt-on” acquisitions which bring additional capabilities or have synergies with one or more of our existing portfolio companies
We take cultural fit very seriously: Spectris has a highly entrepreneurial culture that provides autonomy and in return expects delivery of excellent results. At the same time we seek to preserve the culture that has made the companies that we acquire interesting to us in the first place. Not every team can fit into our culture.
What size of acquisitions is Spectris interested in?
Typically we acquire companies which are highly profitable, with revenue ranging from £5m+ for high growth businesses, up to more mature firms with revenues of £100m+.
How does Spectris evaluate opportunities?
We evaluate investments on a cash flow return on investment (CFROI) basis, measuring the expected return on investment against weighted average cost of capital (WACC). We look for acquisitions to demonstrate an ability to generate a CFROI in excess of WACC over a 3-year timeframe, in the case of bolt-on acquisitions, or over a 4-year timeframe, in the case of platform acquisitions.
- We have a deep understanding of technology
- Our business is global and we are adept at supporting the international expansion of the companies we acquire
- Our operating businesses are run autonomously, providing accountability and responsibility to their management teams
- Our companies typically continue operating under their existing brand, thereby preserving their heritage and customer, sector and technology focus
- We provide thoughtful support and helpful resources as our businesses grow, professionalise and expand internationally
- We are experienced acquirers and can execute transactions quickly, efficiently and sensitively
- In addition, for corporate or private equity sellers, we are experienced in even the most complex transactions (e.g. carve-outs) as well as the latest M&A trends and mechanics
Owners or representatives of any companies, business units or technology opportunities that fit the above criteria are encouraged to contact Spectris for a completely confidential and exploratory initial discussion on what co-operation or acquisition opportunities may be available that would fit the business objectives of both sides.
In the first instance, please contact Will Lorkin, Corporate Development Executive, Spectris plc, Heritage House, Church Road, Egham, Surrey TW20 9QD, England. Phone: +44 (0)1784 470470.