Growing a company by international aquisition
A Davis Service Group case study

Page 1: Introduction

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Successful businesses know when and how to adapt and change. This involves growing some areas of activity and cutting back on less profitable areas. Companies can often benefit from acquiring businesses operating in overseas markets. For example in Europe, the USA or the Far East, the availability of new customers or cheaper costs of employing people may give competitive advantage. This case...
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Page 2: International expansion

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Expanding into other countries can be a good way to grow a company. In particular, expanding into other areas of the European Union (EU) provides many opportunities for a UK business. The EU currently has 27 member countries. It is a huge potential market. Any business in the European Union has over 500 million customers on its doorstep. Goods and services can flow freely in the single European...
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Page 3: Inorganic growth

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A business can develop by organic growth or inorganic growth. The term inorganic growth describes how a business grows by joining one or more companies together. This can be by: merger- two firms join by agreement. Mergers make it possible to share the resources of the two organisations and focus on the best activities of each. takeover - one company buys at least 51% of the shares of...
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Page 4: Acquisition

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In 2002, the Davis Service Group acquired Berendsen, a company operating in Denmark, Sweden, Norway, Austria, the Netherlands, Poland and Germany. Berendsen was an ideal acquisition because, like Sunlight, it was the market leader in providing textile services in its geographical area. It was better for the Davis Service Group to take over Berendsen rather than set up a new rival company in...
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Page 5: Organic growth

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Organic growth is when a company increases the turnover of the existing business.  Much of the growth of Sunlight and Berendsen involves organic growth. These businesses are market leaders that have been able to learn a lot from each other and share good ideas and best practice. As part of the Group, these companies have increased their customers in existing locations, as well as in other...
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Page 6: Conclusion

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The Davis Service Group needed to grow. Of its original three divisions, the linen hire and textile maintenance services provided by Sunlight offered the greatest opportunities because of the strategic fit factors. The Group's other businesses were sold off to concentrate on the potential of the enlarged European textile maintenance business and to provide funds to invest further in this...
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