Flow & treat acquisition choices shaped by MPM program
13 May 2019
A new program available from McIlvaine Company will help acquirers make the best choices and then maximize the value of these acquisitions.
The McIlvaine Most Profitable Market Program provides with: A valuable tool to select acquisition candidates; A program to integrate the new acquisition painlessly and A growth platform for both organic and acquired companies.
The Most Profitable Market (MPM) Program provides forecasts of the gross margins and EBITA which can be achieved with each product in each industry and in each location. This is based on present and future lower total cost of ownership. This lower cost can be leveraged to increase margins. Estimates of future EBITA using this approach are superior to estimates based on historical performance.
A new product such as automation can lower the cost of ownership for the product being automated. A purchase to match a pump product with the accompanying valves provides a package approach which will likely result in lower costs for the customer. The program eliminates silos between industries, technologies, and products and helps identify profitable R&D investments.
MPM forecasts the specific purchase opportunity at each major prospect. This provides a foundation for bottoms-up collaboration. The newly acquired company local sales representatives can share information with peers in other divisions and pursue each opportunity. This collaboration potential can also be an acquisition criteria. A candidate whose products are well received by important prospects is attractive.
The MPM program is based on understanding processes and technologies and developing new and better products. The resulting higher margin opportunities create funding for increased R&D and further innovation. With shared process and technology knowledge, the acquired company can improve its products and increase EBITA faster.