Strategic acquisitions

Value creation through acquisitions

Acquisitions are an important part of Alligo’s growth strategy. By acquiring well-managed and profitable companies, we can strengthen the business and realise synergies.

The companies acquired must fit in strategically, add clear value and be able to be fully integrated into Alligo.

Prioritise existing markets and product areas

Alligo mainly acquires companies that operate in our existing markets and product areas. Acquisitions enable us to strengthen our geographical presence, expand our customer base and enhance our offering within key product areas as welding.

The acquisitions generate synergies through co-location, coordination of ranges, purchasing, warehousing and administration, as well as cross-selling, for example.

Long-term acquisition process generates a solid pipeline

The work to identify and carry out suitable acquisitions is a long-term and continuously ongoing process, run by the local sales organisations together with a Nordic acquisition team.

A long-list of potential acquisition candidates is constantly added to, evaluated and prioritised. There is usually a pipeline of companies where Alligo is in different stages of dialogue or negotiations – from indicative offer to letter of intent and due diligence to binding transfer agreement. Acquisitions are generally financed using the company’s own funds and existing credit facilities. Alligo is also able to pay in its own shares if this is deemed beneficial by both parties.

Focus on extensive integration

Alligo has a proven model for integrating acquisitions, which is adapted to each individual case.
The key factors for successful integration include:

• Retaining staff and key personnel
• Coordinating ranges and purchasing
• Harmonising pricing
• Coordinating IT systems.

The acquired companies are generally incorporated under the local concept brands – Swedol in Sweden and Tools in Norway and Finland.

The length of the transition period can vary depending on the individual conditions and how well established the individual brand is on the local market. An exception is product media companies in Sweden, which continue to operate under their own established brands as the business is clearly separate from the broad concept brands of Swedol and Tools.