Growth-minded business owners prioritize expansion into business areas where they have a ‘natural ownership’ advantage. Expansion is a key ingredient for business growth and success. Business professionals and entrepreneurs alike often agree that expansion is a driver of wealth and overall success. A key way in which companies expand is through mergers and acquisitions (M&A).
Acquisitions, specifically, allow companies to grow seemingly overnight, and potentially double value. The effects are almost always positive, easily measurable, and immediate. The advantages of acquisitions include an increase in measurable KPI growth, strong returns over the long run with comparatively low risk, expansion into new product and service categories, and onboarding of new technology.
However, it’s essential to have a clear plan for creating value from acquisition targets and integrating them into the current business structure.
The impact of a strong acquisitions deal
One business owner that has experienced exponential acquisition-based growth is Berge Abajian, CEO and owner of Bergio International Inc. (OTCC Pink: BRGO). The global force in jewelry manufacturing and design acquired not just one but two impressively growing companies, which led to growth for all three. Bergio acquired Aphrodite’s in February 2021, a jewelry tech-focused e-tailer, and then GearBubble in July 2021.
In 3.5 years, Aphrodite’s cleared $31 million in sales, including $10 million in sales during the pandemic. In less than two months after Bergio’s acquisition of Aphrodite’s sales increased by 40% to $14 million.
Similarly, pre-acquisition, GearBubble had high-performance numbers as well. The B2B e-commerce customer fulfillment platform processed more than $130 million in sales over four and a half years. Bergio’s acquisition of GearBubble’s assets (51%) has increased the company’s revenue forecast. As for Bergio, revenue has already grown remarkably, a 5,000% increase according to company reports.
This isn’t the only scenario of unprecedented growth due to successful acquisitions. Jason Ditkofsky, a serial entrepreneur and CEO of Channel Letters USA and McNeill Signs, has seen financial gains from acquisitions as well. Jason sold two franchise businesses in the commercial signs industry and purchased Channel Letters USA to control the sign manufacturing process. He then bought McNeill Signs, which would position the company to be full-service. Since both acquisitions, Ditkofsky has seen a 70% year-over-year growth from 2020 to 2021.
Identifying value-creation opportunities through acquisitions
Exponential revenue growth is a huge indicator of successful acquisitions, but there is another advantage: expansion into new product categories and technology. Truly great acquisitions allow for companies to combine their unique products and services along with technology, leading to full vertical integration.
Bergio excels in jewelry manufacturing and design, yet identified gaps as well as opportunities for acquisitions to fill those gaps – specifically online e-commerce. “This acquisition of GearBubble will expand our reach in the B2B space, and the addition of GearBubble’s technology team brings Bergio to a new level,” says Berge Abajian.
As for Aphrodite’s role for Bergio, the value creation opportunity is focused on technological advancement. “With the technological platform [from Aphrodite’s] and personnel’s expertise we have acquired in this transaction, we can now also immediately become a direct to consumer ‘player’ in the global internet jewelry market,” Berge adds.
The acquisition of these companies, along with their products, services, and technology allows for full vertical integration. “The acquisitions have helped eliminate redundancies and helped us become fully vertically integrated,” says Jason Ditkofsky.
He isn’t the only one that has reaped the benefits of vertical integration. “Acquisitions of both Aphrodite’s and GearBubble have allowed for Bergio to be vertically integrated, allowing us to launch our fine jewelry and bridal platform to compete with other major luxury jewelry e-commerce websites while properly serving our customers,” says Berge Abajian.
Acquisitions can unlock powerful competitive advantages
Acquisitions can lead to impactful advantages, especially with the integration of value-creating products, services, and technology. However, acquisitions should be carried out with careful consideration.
Acquisitions shouldn’t be solely based on “gut instinct” or defined post hoc to validate a theory behind an exciting deal. A successful acquisition should be supported by strategy and assess critical factors relating to due diligence, and integration planning.
“Culture of the company that I will be acquiring is the first and foremost thing I look at. There will never be a seamless transition, but if the core values of the companies are not closely aligned, there will be a lot of bumps in the road,” according to Jason Ditkofsky. The right acquisition can yield real results if careful steps are taken.
Melissa Moraes is a freelance writer covering startups, socially responsible brands, and the newest trends in the world around us. Based in South Florida, she enjoys sunny beach days and motorcycle rides in her spare time.
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