A multinational company sought to maximize the potential of its aftermarket business, a high-margin but historically overlooked unit within its portfolio. With a fragmented market landscape across Europe, the company needed a strategic M&A approach to position the business for sustainable growth and unlock its full market potential.
Challenge
Despite having a well-defined strategy for its core business, the company faced challenges with its aftermarket division. Though strategically important and profitable, this business unit was considered secondary and lacked management focus. Leadership sought a way to enhance its market presence and integrate it more effectively into the broader business strategy.
Implementation
A detailed analysis compared the aftermarket division with the core business, assessing key differences in customer portfolio, competition, distribution channels, core competencies, market dynamics, and growth potential. The findings highlighted the need for a structural shift to fully capitalize on the aftermarket segment’s value.
A two-step M&A strategy was recommended. First, the aftermarket business was spun off into an independent entity to allow greater strategic focus and operational efficiency. Second, a “buy-and-build” approach was implemented to drive expansion across Europe. By acquiring smaller, independent players in the highly fragmented aftermarket sector, the company strengthened its market position while leveraging financing facilities to support the growth plan.
Achievements
By giving the aftermarket business the independence it needed, the company unlocked new growth potential and expanded its market reach. No longer a sidelined division, it became a competitive player, serving both the core business and industry rivals. The buy-and-build strategy turned market fragmentation into an opportunity, fueling targeted acquisitions and strengthening the company’s position across Europe.
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