Identifying acquisition targets
Norva24 does acquisitions both to enter new geographies, and to strengthen its position in existing geographies. Norva24 believes that, in the near term, the primary strategic focus will be on expanding and densifying the operations in the current four countries where Norva24 has operations as well as preparing market entries in identified markets, like Austria, Switzerland, BeNeLux, Finland and UK.
When evaluating acquisition targets in order to enter new geographies, Norva24’s priority is on platform targets with a significant existing network that can be used as a basis for geographical expansion, a good local reputation in the new market, solid business processes, a modern vehicle fleet, a strong local position and reputation in the new market, and a strong and committed local management team. In doing so, Norva24 aims to identify market leading UIM businesses with solid reputations for delivering high quality services, with a diverse portfolio of customers and stable track record of growth, well invested asset base, professionalized service offering, strong leadership, and entrepreneurial culture. Additional goals when acquiring platform companies in new geographies are to establish significant presence in the new market, acquire expertise and depth in existing services as well as new solutions and competencies. Norva24 aims to identify new market acquisition targets with a dominant share of revenues derived from UIM services.
When identifying bolt-on acquisition targets, Norva24 looks for targets that support the strategic priorities of each specific existing platform, such as to increase local network density in each area, expand the geographic footprint to a new area or optimizing its product portfolio or customer mix in a specific market, while also achieving synergies. In doing so, Norva24 aims to identify bolton acquisition targets with a with a dominant share of revenues derived from UIM services. Norva24 also looks for bolt-on acquisition targets with a strong, committed local management team, a modern vehicle fleet, a strong local position and local brand awareness, and potential for operational and cost synergies. Norva24’s acquisition strategy is developed by the Management team.
Identifying acquisition targets involves both a top-down and bottom-up screening process whereby local branch managers and Country CEOs identify and propose potential acquisition targets. Norva24 thoroughly analyzes strategic decisions regarding acquisition planning and sources potential targets based on its strategic criteria. Centralized screening and selection are generally based on the following considerations: rationale and strategic fit, the target’s management team, financial targets, the age of the target’s vehicle fleet, ESG considerations, profitability, and reputation. Furthermore, local branches play an important role in the generation of acquisition targets.
The lists split the screening into the following categories:
- Identified opportunities: as of the date of this annual report, a list of approximately 1,900 UIM companies identified in Norva24’s current four geographic markets.
- Engaged in discussion: as of the date of this annual report, a list of approximately 42 priority targets, that meet Norva24’s acquisition objectives and criteria in the relevant platform, with which the company has an ongoing discussion;
- Advanced Discussions: as of the date of this annual report, approximately 17 priority targets for which Norva24 has executed a NDA, a letter of intent or is undertaking due diligence typically under exclusivity arrangements.
The relevant Country CEO proactively approaches targets on the identified acquisition opportunities list to either initiate the acquisition process or to maintain a close dialogue with the owners of the respective UIM companies to develop a good relationship and become the acquirer of choice in case they decide to sell in the future.
