Chances are you have heard about mergers and acquisitions cases, and it is no surprise that many companies utilise this strategy to increase their market share, gain access to new products, technologies, and markets as well as increase their profitability – an approach which we at CLIQ also apply. We have sat down with Erik Cornelissen for an interview that gives us more insight into M&A processes, long-term implications, challenges and more. Erik is our Director of Mergers and Acquisitions, has an extensive background in the entertainment industry and has been with CLIQ for almost two years. M&A in the media sector has always played the biggest role in his professional career.
Hi Erik! Can you explain what Mergers & Acquisition is in a nutshell?
Mergers & Acquisitions, or M&A, are business transactions in which the ownership of a company, a part of the company, or specific assets of the company, are transferred to another company. M&A can allow companies to grow or downsize as well as to change the nature or competitive position of a business. In the case of CLIQ, we see M&A as an opportunity to grow. This means that we are typically the acquiring or investing company.
Why did CLIQ decide to pursue the strategy of M&A?
CLIQ faces a fantastic organic growth path, and additional non-organic growth from M&A activities should accelerate our overall growth. Our non-organic growth is focused on bringing additional revenue, content sourcing (improve portfolio with additional categories and increased content) and obtaining new expertise (e.g. alternative marketing and alternative payment methods).
Can you describe the daily routine as an M&A team member at CLIQ?
We continuously scan the market for interesting opportunities. We do that ourselves, with the help of our own researchers and CLIQ’s colleagues in product & licensing. We also use a network of corporate finance and M&A advisors, investors, private equity, media executives and data providers. If we find an interesting ‘target’ the M&A process continues with discussions with that company, analysing their business and financials, thinking of a possible deal structure, and negotiating such a deal with the other party. In this final phase, we work closely together with our legal department.
What are some challenges you need to overcome in M&A?
The selling party has typically much higher expectations of the value of their company and the price they expect to receive. Companies in this market are not always profitable yet (or at least not as profitable as CLIQ) and may have too much debt on their balance sheet. That makes it not always interesting for CLIQ and its shareholders as a transaction should create value for our shareholders. During the M&A process, it can occur that the company is less interesting than originally expected (business outlook less attractive, technology not as good as first thought, management not strong enough, etc.). We are always searching for the perfect fit.
What makes M&A so interesting?
The companies we look at are very diverse in terms of business, management, and scope. And it is very international. In this field, processes are not predictable, and time is crucial. But completing a transaction or, in other words, “closing a deal” is very satisfactory!
Where do you see the M&A department at CLIQ five years from now?
I hope that the team will be able to look back at a very successful 5 years with many transactions closed and having brought additional value and growth to CLIQ.