Acquisitions are a central pillar of our growth strategy
Making successful acquisitions is a critical part of Volex’s recent history, and the Group has acquired five businesses since 2018. The additions to the Volex portfolio: MC Electronics, Silcotec Europe, GTK UK Ltd, Ta Hsing and Servatron have allowed us to accelerate our pace of growth and diversification. Today, more than 25% of Volex’s total revenue comes from businesses that have been acquired in the past three years.
But it’s not just about the number of acquisitions, it’s about the underlying quality of the business operations, their technical capabilities and customers, and the strategic value to Volex. We are moving up the ‘value chain’ by expanding our manufacturing capabilities and geographic spread, to become an indispensable partner to our customers by providing higher levels of service on a global basis.
Our approach and experience in making acquisitions reduces execution risk. We look for:
- Attractive Characteristics: We assess the end markets, including secular growth drivers and opportunities for cross-selling our global capabilities and realising supply-chain and other cost savings;
- A Suitable Company Profile: We analyse the target’s market position, cost competitiveness and potential, including customer reputation and margin-expansion opportunities;
- The Potential to Deliver Value Creation: We consider potential in the context of our segments and our overall portfolio, including opportunities to cross sell geographically, advance our technology, increase diversification and improve the quality of our overall revenue stream.
‘We will continue to re-deploy capital, as we generate free cash flow, into high-impact cash-generative acquisitions. We will continue to strengthen our market-leading positions in cable assemblies and power products while broadening our overall portfolio, with a clear eye towards ensuring long-term, sustainable positions in attractive markets around the world.’ Nat Rothschild, Executive Chairman.
We structure each acquisition carefully to meet the unique needs of the seller, while delivering ongoing participation, incentivisation and upside to reduce risk and deliver value to Volex shareholders. Our decentralised operating model preserves the strengths and identities of each business, while the Volex Group brings the strength and resources of a global manufacturing footprint, new manufacturing technologies, financial support, and shared learnings. This balanced approach positions our businesses to contribute to our shared purpose in unique and meaningful ways.
From adding exciting new technologies to injecting new perspectives and skills to our growing global team, our focused acquisition strategy is essential for our customers, our employees and our shareholders.