An ACI C-Suite Webcast with Lots of Critical CI Lessons

(Listen to the full Webcast, “Throw Out Market Share”)

Recently, a couple hundred ACI alumni and others spent 45-minutes with Patrick O’Keefe, former CEO of Watts Water Technologies. Pat gave us the reasons and approaches taken when he made nearly two dozen acquisitions during his tenure at Watts. He took his audience behind the “closed executive door,” giving those CI professionals listening to his webcast, lessons about what is on a CEO’s mind and what kind of intelligence is critical at the deal-making moment or for the long run.

He started off by stridently telling us that market share is and always was of little value when considering an acquisition.

“Four times during my career, I was able to acquire a competitor,” he clarifies, “and each time we spent considerable effort measuring market share. Once the deal was completed we found that both the acquired company and the acquiring company had overestimated their own market share and underestimated the market share of the other.”

At the same time, he listed a number of critical pieces of intelligence that he found invaluable nearly every time he approached a deal:

  • Combined value: “Ask yourself how the combined businesses generate a better value offering to its customer than they each did on its own.”
  • Cost-saving synergies: “What are the current sales and marketing costs of the rival or potential acquisition target? Can you anticipate cost savings that would occur with the combined entity?”
  • Soak up information at trade shows: “I would personally attend all trade shows and walk the show floor, speaking to potential acquisition candidates. You would be surprised at what you can learn by asking simple questions.”
  • Value creation is about more than the numbers: “You need to do your own analysis of value creation.” By that, Pat O’Keefe meant not just the numbers (though they are paramount) but also the softer intelligence, such as stability of the company’s management and the quality of the executives that make the company tick.

During the last ten minutes, participants asked questions of Pat. The topics ranged from discussing risks of serving the executive suite to having Pat identify other types of important insights he would want from the CI team.

During his closing remarks, Pat made it very clear that his 10-year odyssey hunting for and securing 23 acquisitions, demanded he continuously monitor his marketplace. He told his audience how he diligently kept track of some of these acquisition candidates for nearly a decade. Pat went on to urge his listeners not just to respond to questions but to be pro-active and track their critical issues and important rivals.

Stay tuned for our next webcast on March 12, where you will have the opportunity to meet David Norton, former CMO of Harrah’s and Caesar’s casinos. Learn how Norton outmaneuvered his competition during the Great Recession.