Enlisting the aid of Nicholas Center students, 3M, a multinational conglomerate based in St. Paul, Minnesota, recently assessed its acquisition strategy. 3M asked the Nicholas Center team to develop demanding criteria that 3M could use to winnow the universe of possible acquisitions in ten to twelve industries down to a manageable number of potential targets. Additionally, 3M asked the team to do a deep dive on the five most promising markets and identify three to five attractive acquisition targets in each market.
The team welcomed the requests and constructed criteria that could readily be applied across multiple industries. These criteria included evaluating how complementary the companies’ product offerings were with 3M’s and the operational synergies that could be gained. 3M viewed these criteria as illuminating and useful.
Turning to the deep dive of the most promising markets, the team employed a variety of campus resources such as CapIQ and IBIS world reports on which to base their analysis. Given that 3M was asking the team about hybrid industries, the team sifted through much research to pull relevant data and synthesize their findings to form accurate depictions of these industries. The team even made site visits to retail stores in these industries and conducted interviews to assess retailers’ perceptions of particular products.
One challenge confronting the team was that most of the potential targets they identified were privately held. Undeterred, the team persevered and formed their assessments of the targets based on the rigorous research they had performed. Ultimately, the team was able to provide 3M with an industry overview of each of the five attractive markets that included major trends, projections broken down into segments, supply chain information, and the key skills required of companies to succeed in that space, along with a list of attractive targets.
3M was delighted to have such in-depth analysis while the Nicholas Center students felt affirmed in their capabilities as corporate finance experts and ability to add value to employers following graduation.