Growing through carefully selected acquisitions, as well as organically, is fully in line with Axel Johnson International’s business concept. We buy, own and develop industrial companies. But not just any companies. Our businesses must be strong in their niche, leaders in their local market, and have the potential to strengthen the group both geographically and in selected industrial segments.
“We buy companies that fit into our structure, but each company we acquire has a unique DNA. Our job as the owner is to understand what that is in order to contribute to profitable development in the long term,” says Hans Glemstedt, Head of Group Strategy and M&A at Axel Johnson International.
With an ambitious growth goal and moderate market growth in many industrial segments, Axel Johnson International has increased its pace of acquisition. Competition for well-managed companies, however, is extremely tough. There are many more prospective buyers out there than companies for sale. The fact that Hans and the group managed to make as many as ten acquisitions in 2016 is a testament to an attractive offering, particularly for entrepreneurially owned companies.
“An initial feelgood factor between the seller and buyer is crucial. It’s often founded on an impression of professionalism, that you quite simply mean what you say,” Hans explains. “That’s where our profile as a family-owned, unleveraged, value-driven group wins through. Moreover, our owners are themselves entrepreneurs of the fourth or fifth generation. They have decided to grow in certain areas and have the financial muscle and stamina to promise long-term development. It’s clear that Axel Johnson International doesn’t just focus on quarterly reports, and this appeals to a lot of people.”
Potential acquisitions are found by constantly monitoring different industrial sectors and through contacts in our own network and more than 85 subsidiaries, but also through external advisors and business brokers. It’s not uncommon for interested companies to make the first contact with Axel Johnson International or our companies – something we both encourage and welcome. Attracting entrepreneurs who are looking for an opportunity to take their company to the next level is right in line with our ambitions.
Opportunity always trumps size.
Hans says: “Our basic philosophy is that the individual company’s MD and management should be allowed to fully manage and be responsible for the company’s future development. We give them the opportunity to shoulder that responsibility. Combining decentralised management with good financial control is demanding, but clearly defined goals and expectations are our most important contribution to promoting our companies’ success.”
Even though you are convinced your company is ending up in the right hands, selling your life’s work can be a real wrench and a very emotional thing to do. And even someone who’s devoted virtually their entire life devoted to business development can feel anxious ahead of the changes that new ownership brings.
“A lot of people are afraid that their day-to-day lives will become too bureaucratic. That they’ll need to invest in an enterprise system. That they’ll have to spend a lot of time on reporting. That someone from outside, who doesn’t know everything about the business, will be their manager,” Hans acknowledges.
“But when you get support, group affiliation and industrial synergies in return, more structure is a small price to pay. Greater security is, after all, one of the reasons why owners and entrepreneurs come to us. We’re like a big family, offering a good home for both the company and the employees.”