Understanding serial acquirer's support for acquired companies : How can a serial acquirer facilitate acquired companies’ value creation?

Abstract

Entrepreneurs can face multiple challenges and opportunities regarding the continuity of their companies. They might need to get more resources for growing their business, find a follower for their company or diversify their risks. For entrepreneurs seeking to ensure the continuity of their companies through ownership transition, serial acquirers can provide one option. Serial acquirers are long-term owners of entrepreneurial companies. With their acquisition and ownership-driven business model, serial acquirers can provide entrepreneurial companies with facilities and resources to grow. However, the understanding of how serial acquirers really can address entrepreneurs’ challenges and opportunities as owners is limited.

Hence, the purpose of this thesis is to understand how a serial acquirer can support the value creation of acquired companies. To understand the acquired companies’ value creation and serial acquirer’s support, the service-dominant logic view on value creation is introduced in theoretical review of this thesis along with the serial acquirer literature review. With service-dominant logic view, the resources that serial acquirer provides acquired companies, the practices and conflicts of value co-creation, and the value-in-use realized from the serial acquirer’s support addressing the challenges and opportunities in acquired company’s business are researched.

The research was conducted as a qualitative interview study to profoundly understand serial acquirer’s support. Managing directors of seven acquired companies were interviewed in one case company that operates with serial acquirer business model. Research questions were addressed with thematic analysis of the research material from semi-structured interviews.

Based on the research, a framework was developed concluding the findings of how serial acquirer’s ownership supports the value creation of acquired companies. Serial acquirer business model provides acquired companies with a stable owner which can increase the companies’ credibility and facilitate at diversifying former entrepreneurs’ risks. On the other hand, through its company portfolio, serial acquirer can provide its companies with a network for growth through which companies may benefit from economies of scale, cross-selling synergies, acquisitions and career development opportunities. In addition, serial acquirer can provide acquired companies with financial support in growth investments, and capabilities to strategic decision-making from both parent company level and through its portfolio. Hence, enabled by clear value co-creation processes serial acquirer can address companies’ challenges and opportunities of continuity.

The findings of the research indicate that serial acquirer can facilitate the value creation of acquired companies with its acquisition and ownership-driven business model. Hence, the research contributes novel insights to the acquisition process by providing a framework of serial acquirer’s support for its companies after the acquisition. With this framework both the entrepreneurs and serial acquirers can better understand the benefits and critical success factors of a serial acquirer as an owner and utilize this understanding in business development.