IMCD aims to grow its revenues and results both through organic growth and acquisitions. First and foremost, the Company is focused on growing the market share of the products of the world class suppliers it represents. In addition the Company uses its strong market intelligence to identify strategic product gaps, possible acquisition targets and related opportunities across the different geographies.
Organic growth IMCD's organic growth strategy has three main drivers:
GDP growth in the different geographies that IMCD operates
increasing market share by outperforming through sales excellence
expanding with existing suppliers in additional geographies and adding new suppliers and products to the portfolio
Throughout IMCD, there is a coordinated and focused approach towards expanding market share of existing products and towards business development with the primary aim of expanding the product portfolio with both existing and new suppliers. IMCD aims to achieve organic revenue growth that is higher than market growth in general.
Acquisition growth Acquisitions have historically been an important part of IMCD’s growth and will remain a focus going forward to assist in building scale and efficiencies, complementing its product portfolio and expanding its geographic and strategic market coverage.
IMCD takes benefit from the highly fragmented distribution market and the continuing consolidation trend largely driven by increasing supplier demands for multi-country agreements. Since its formation, IMCD has acquired over 50 companies, providing the current presence in Europe, Asia Pacific, the US and Other Emerging Markets. IMCD has demonstrated its capacity to identify, execute and successfully integrate acquisitions. Finding suitable acquisition targets is an ongoing process with a high level of complexity related to ensuring that there is the right cultural and business fit combined with a willingness of the target company to become part of IMCD.
IMCD's selective acquisitions strategy is not determined by take-over budgets or revenue growth targets. IMCD's strict acquisition criteria focus first and foremost on a strategic fit providing a platform for further growth both geographically and in complementary product markets. The primary aim in all acquisitions is to achieve added value for IMCD's suppliers and customers. Barring exceptional circumstances, an acquired company should be able to contribute to IMCD's cash earnings per share from the date of acquisition.
IMCD's acquisition activities are driven centrally by an experienced management team supported by external consultants and are put before the Supervisory Board. Detailed and critical valuation and full scope due diligence is carried out in order to identify and assess any price impacts and potential risks. Transaction structures and purchase contracts are tailored to mitigate identified and unidentified risks.
Integration of newly acquired companies is effected through a well structured integration program providing for a swift transition to IMCD's internal reporting, control and compliance systems and ensuring an optimal realisation of operational and business synergies. Acquisitions are always subject to the availability of appropriate management attention and to IMCD's financial policy that is focussed on a strong balance sheet and limited financial risks. Most acquisitions are financed from IMCD's strong cash flow generation and its flexible loan facilities.
Using its extensive network and in depth market knowledge, IMCD will continue to pursue selected acquisition opportunities to further expand and enhance its business model in both developed and emerging markets.