The SME's Guide to European Manufacturing

Building Your Relationship with the Owner Is Crucial for SME Acquisition in Europe

April 25, 2014

American SMEs should actively look for SME acquisition opportunities in Europe. They are available. The key for success is not "technical M&A" - it is your personal relationship that makes the difference!

R. Paul Vuolle Blog

If you are looking for good companies having sales around 15 to 50mioEuro and making profits (some of them clearly above industry average) now it is a good time to come to Europe and look for expansion opportunities.

Are the owners ready to sell? Yes, they are. Nevertheless there seems to be the on going issue with valuations and the current owner understanding that it is time to hand over the helm.

Some entrepreneurs wait until they are 75 or older and their leadership impact has disappeared long time ago. One entrepreneur, almost 70 years old, just confessed me recently; “I have a feeling that I do not own my company anymore”.

One entrepreneur did wait so long that the business lost its appeal; performance crashed!

Waiting too long is an issue when contemplating the hand over to next generation This could lead into a disaster. However, the buyer should realize this as well by actively talking with the seller about these issues and trying to avoid together the performance drop happening.

For both parties, buyer and seller, it is an advantage to be early on the market. Be there with the seller, so that he feels gradually comfortable with your take over idea. Talking only about valuation and highflying strategy is in my experience a dead end.

Europe offers for American SMEs tangible opportunities to expand through acquisition. Usually developing those good opportunities takes a lot of time. It is not unusual that a succession planning with a potential buyer takes couple of years. So start early!

Find your leads alone or with a boutique M&A consultant help and start the discussion with the target SME owner and keep it going....

Buying a company from a successful entrepreneur needs usually a lot of relationship building.

Do it early and right and you can enter the European market through a good company acquisition.

About the Author

R. Paul Vuolle Blog | CEO

R. Paul Vuolle's blog "The SME's Guide to European Manufacturing," has moved. You'll find his latest ideas and commentary on SME European Manufacturing on IndustryWeek's IdeaXchange.

You'll find more articles written by Paul at http://www.industryweek.com/blog/smes-guide-european-manufacturing .

R. Paul Vuolle, CEO of Bellevue SME Advisors GmbH in Switzerland and Germany, works actively with small and medium (SME) size manufacturing companies in Europe in SCM/Outsourcing, logistics, turnaround and restructuring, market expansion, as well as succession planning and financing. He also frequently supports technology start- ups in building up their business.

Paul has over 20 years operational industry experience in engineering, electronics, industrial automation, building automation, investment goods like electrical drives, automatic test & measurement systems, HV Transformer production systems. During his career he has worked in manufacturing industries in supply chain management, outsourcing, logistics, production, R&D and successfully selling to international large key accounts. Paul has also run a sizeable amount of M&A transactions in numerous countries around the world.

He has built up his experience working in various leadership positions and functions in large corporations, such as ABB, and having executive positions in medium-size family companies and as a technology entrepreneur.

Paul is MSc. E.E. from Swiss Federal Institute of Technology in Zürich as well as BSc.E.E. from Helsinki Institute of Technology.

Paul is a long time member of IEEE and of its Industrial Applications Society.