Leadership clinic: Is this the right time for M&A?

Octopus Group co-founder and chief executive Simon Rogerson answers questions on starting up, scaling up and SME life.

by Simon Rogerson

Question: We run a small chain of restaurants. We actually weathered the pandemic fairly well, though we had to adapt a lot, and very quickly. An acquisition opportunity has come up for us to expand into an adjacent market in the UK. This would be our first major foray into M&A, but I believe it could be a fantastic growth opportunity – we’re really complementary businesses. But it’s still a major commitment – we’ll have to take on more debt – and if the economy overheats or the recovery doesn’t last the way we all hope, we could end up biting off more than we can chew. Is this the right time to take a risk?

Simon Rogerson says:

Congratulations on weathering the storm. The hospitality sector has borne the brunt of the pandemic so it’s great to read about a business that has emerged intact. 

There are a few separate elements to your question. The first is whether now is the right time to expand from an economic perspective. The cost of debt is clearly in your favour and most businesses within the hospitality sector will be much better value today than they were a year or so ago.

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