By Eugenio Micheletti* for staffingamericalatina

Inorganic growth requires an in-depth analysis not only of the target markets but above all of the alternatives available in those and other alternative markets. There are more important reasons than the value of the companies that determine that a company is more attractive to a given buyer (though not to all).

We advisors have had to make the preliminary analysis of possible alternatives more sophisticated, weighing the markets according to political, macroeconomic and regulatory conditions, but without ruling out the opportunity to invest in those markets with macroeconomic and/or political ups and downs. In these cases, some aspects related to the buyer’s strategy and preferences are analyzed: service mix; portfolio quality; portfolio atomization or concentration; vertical sectors served; gross margin (pricing and direct cost management); physical and virtual offices (geographic capillarity); team composition (talent); incorporation of technology for management (systems, processes and digitalization).

There are always interesting alternatives for each of the investors, and in order to carry out an assertive study it is necessary to have a deep knowledge of their strategies, needs and expectations.

As far as sellers are concerned, the advisors draw up a work plan with the Directors to make the company more attractive to potential strategic buyers, since profitability is not enough to be a desirable option. The development of the management team and the relationship with clients, among other relevant aspects, are highly valued factors.
While investors may be cautious in a world of high inflation, it is also true that there is liquidity with negative interest rates. This can motivate buyers to enter markets by acquiring an attractive company, even in the face of political and social difficulties.

In this post-pandemic stage, investors need to deepen the analysis and weighing of alternatives from a strategic point of view, in order not to miss opportunities. Sellers, on the other hand, must prepare their organization for a possible sale process, since they can definitely be attractive even in turbulent markets.

Without a doubt, the region today demands a significant dose of sophistication and pragmatism.

*Director of Emerging Staffing Brokers