$17.5 Billion Holding Company Seeks Additional US Acquisitions

 

Business Challenge

 

$17.5 billion Associated British Foods (ABF) established a footprint in the US when it acquired Mazola corn oil, Argo & Kingsford’s corn starch, Karo and Golden Griddle syrups from Unilever in 2002, and later added Tones’ spice and Fleischman yeast from Burns Philp in 2004.  This combined entity was named ACH Foods.

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After a few years of integration, sales force and systems consolidation, there was once again an appetite for bolt-on acquisitions in the US.

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But what businesses should ACH consider?  Their current businesses while providing scale, had few natural synergies.  Rather than a defined strategy, ABF (who held the purse strings) preferred a more opportunistic approach, focused on value-based acquisitions, acquired at low multiples.

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One challenge with this approach is that is inherently broad and has the potential to suck up tremendous amounts of executive time. 

 

 

The Solution

 

What was needed was a screen – a means to filter through the myriad of opportunities to quickly identify those with the best fit, greatest upside and highest odds of success.  This was a job for Simplimental.®

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The idea behind Simplimental® is that ACH will realize the greatest success by focusing on those acquisition opportunities that are most SIMPLE to execute and provide the most INCREMENTAL value.

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We started with a C3 analysis to determine ACH’s Capabilities, Capacity and Constraints.  This helped everyone understand and align around the key factors that made acquiring and integrating a business SIMPLE for ABF.  It was this knowledge that helped ACH to pass early and often on acquisitions where due to poor fit, they would struggle to execute, and instead focus on the critical few where they had a greater “right to succeed.”

 

By focusing just on the deals that make it past the screen, we preserved critical executive team time for the few deals that really mattered. 

 

When it comes to acquisitions, team focus and strong alignment matter.