Defining new M&A strategies
'M
mergers and acquisitions
The rapid and global pace of consolidation both in the agribusiness (F&A) and
health care markets represents an important opportunity for our organization,
and explains our vigorous push to heighten our profile in the mergers and
acquisitions (M&A) business world-wide. Brian Havill, architect of our new M&A
strategy, outlines the components of success.
One-stop shop
Top ranking
Fielding cross-border teams
Sweet success
Meaty mandate
Four-tiered capabilities
li What'sNewS Issue 10'October 1998
&A, seen from a wider
perspeetive, is something that
emanates from the quality of your
relationships. What you get out of a
relationship is determined by what you
actually bring to the table.' Havill cites
statistics, recently published in the New
York Times, that state that four out of
every five American M&A deals were
concluded without the assistance of an
M&A advisor. In other words, clients no
longer automatically turn to their bank
simply to execute deals. What they do
need, Havill believes, is assistance in the
process of forward strategie planning. 'We
need to become more proactive and
anticipate events based on our knowledge
of target markets,' Havill continues. 'This
is what Iets you get into a company early
- even before there is any concrete talk of
an M&A deal. Your task is to become a
part of the clients' think-tank - the place
where their strategy is hatched. You have
to be able to offer value-added insights
and generate a flow of attractive ideas. In
short, you need to be integrated in the
clients' decision-making process at the
very highest level - by which I mean with
the chairman or the CEO. Only then,
when the time comes to implement any
new strategy, can you hope for additional
business as far as execution or otherwise.
Knowledge is our only trump card in this
business.'
Indeed, our commitment to a research-
backed, industry-focused, client-targeted
approach to M&A flows from the fact
that it offers the ideal platform for
projecting our expertise. Both the F&A
and health care markets are rapidly
consolidating, and if we can use our
knowledge to assist and integrate
ourselves more closely with our
customers, this can open doors for cross-
selling a wide variety of other products
and services and enable us to become a
'one-stop shop.'
Architect of our new M&A strategy, Brian Havill
Substantial investment in time and
resources are being poured into
recruitment and expanding our M&A
operations in western Europe, the
Americas, as well as in the Far East.
Havill estimates that the current M&A
team of some 40 professionals will have
expanded to roughly 68 by the end of
next year. In the same period, revenues
should doublé to NLG 40 million. The
aim is to become a leading global strategie
adviser not only in F&A and health care
hut also in the F&A-related logistics
sector, which is emerging as an industry in
its own right. 'Within five or ten years we
should rank among the top ten players
irrespective of whether you measure it by
the value or by the volume of deals
concerned,' Havill says. A related
ambition is to subsequently increase the
average transaction amount.
'In our focus sectors, there are about 300
companies world-wide with which we are,
or with which we should be doing
business. To really get into these target
companies at the very highest levels, we
also need to strengthen and leverage the
power of our network. Rabobank is
unique in that it can field cross-border,
cross-functional teams that bring together
expertise in individual products, in our
focus industries, and also in the ways
things actually work in local markets in
the overall effort to help our clients
achieve their strategie objectives. Indeed,
one of our great advantages is that we are
a genuinely international bank. Wherever
we have a presence, it is a local one; and
we intend to support our global clients
virtually anywhere in the world.'
Havill points to examples of recent
mandates that show how these strengths
can work to our advantage. For instance,
the mandate to help the UK's Cadbury
Schweppes acquire the Dutch con-
fectioner Verkade. This came after a
carefully-prepared presentation to
Cadbury's senior management in London.
Accurate strategie analysis, combined
with our strong local contacts on the
market concerned, as well as our
network's strong cross-border execution
capacity, helped clinch the deal, which in
turn established an important top-level
relationship with one of the 300 global
target clients in our sectors of expertise.
It was a good example of how business
flows from involvement in the earliest
phases of a prospective deal.
Similarly, in France, we were asked by our
cliënt Sobel, a leading player in the animal
by-products market, to help formulate
scenarios and options for the company's
future development and growth. Our pre-
existing relationship with the firm,
coupled with our acknowledged expertise
in the food/meat complex, helped deliver
this important mandate. Another, also in
France, was our assistance to Heineken in
the sale of one of its local subsidiaries:
again, an established relationship, coupled
with the existence of a truly international
M&A and a thorough, researched-backed
knowledge of the local drinks market,
came together to help realize the deal.
The key to substantially expanding the
number and quality of our M&A
