The expansion of a Belgian investment holding: add-on and new acquisition strategy

Abstract

AIM Group is a Belgian investment vehicle founded by Dieter Aelvoet in 2014. Their investment strategy is to acquire established family businesses in B2B niche markets. Together with a new external CEO, the current shareholders are out bought out via a leveraged buy-out. The long-term vision enables the investment holding to created added values and synergies by expanding their portfolio. The current portfolio of AIM Group generates a consolidated turnover of 32 million EUR and consists out of DD Engineering, Vandapower, ESTEE Coating Solutions and Dupont Electro. Since AIM Group is upscaling and wishing to increase its deal flow, this project has two clearly defined research questions. Firstly, an add-on strategy for the three current participations: DD Engineering, Vandapower and ESTEE Coating Solutions. DD Engineering is a multidisciplinary engineering group, that wishes to acquire another company that complements its current activities in Belgium and by extension in the Netherlands and the north of France. Vandapower is a European leader as a one-stop shop for all battery and battery charger components, from connectors and cables to workshop tools. The add-on strategy of Vandapower was divided into two parts: add-on targets similar to Vandapower’s current business and new business opportunities for Vandapower. ESTEE Coating Solutions is a specialist in powder coating installations and equipment, in which they deliver turn key solutions of fully customized powder coating lines. The add-on strategy was divided into two parts: synergies with powder coating equipment dealers in Europe and vertical integration with subcontractors in Eastern-Europe. Secondly, a new acquisition to add to AIM Groups’ portfolio, which fits in their buy and build strategy. AIM Group is expanding and wants to increase its deal flow. The purpose of our project was to provide them with information regarding new Belgian acquisitions to enlarge their portfolio. For these new acquisitions, AIM Group wants to establish itself in the world of outsourcing (interim, search & selection, secondment and consulting). This project comprises an extensive add-on strategy for the current participations and a new acquisition target to ensure the further expansion of the group. These potential targets were extracted from financial databases Belfirst, Orbis and Companyweb. Specific criteria to set up the data lists were based on input from AIM Group, the participation and us. Next to this, additional data was extracted from datasets provided by AIM Group by conducting a Google and LinkedIn search. After a first check of all the retrieved data to analyse whether their business was in scope or not, the potential ones were listed in a suspect list. A second in-depth look of this suspect list gave more insights into the possibilities of incorporation as an add-on for the participation. The related CEO also reviewed the suspect list before the potential ones moved on to a prospect list. More financial and shareholder data was added to the targets in the prospect to evaluate the feasibility of a take-over. The final list of suitable targets was converted into slides and/or an extensive Excel file. These deliverables provide a summary of the most important information of the final prospect list targets including the type of business, key financials and shareholder structure. Out of the 5030 companies analysed, we proposed 99 add-ons targets for the three participations and 131 new acquisition targets for the expanding AIM group’s portfolio. During our search faced some issues by extracting company - and industry specific data out of the above-mentioned data sources. Orbis is by far the most user-friendly data source for financial data and information about the shareholders. Since not all reporting requirements for private owned companies are similar in every country, we experienced some blind spots in the financial data. Therefore, we created a data documentation matrix for all the companies and how well defined the industry classification codes are.