X-Factor cover image

X-Factor

Striking a Balance Between Organic Growth and M&A

Feb 1, 2024
Tom Walzer, CEO of Saco Foods and expert in CPG manufacturing, shares his insights on the delicate balance between organic growth and mergers & acquisitions. He outlines six pillars for M&A success, including strategy and synergy. Tom reflects on lessons learned from his Fortune 500 experience, emphasizing the importance of trust in leadership transitions. The conversation also dives into identifying market 'white space' for growth, and how platformization can enhance acquisition strategies while keeping debt under control.
44:48

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Podcast summary created with Snipd AI

Quick takeaways

  • The CEO emphasizes a family-oriented culture that fosters collaboration, enhancing employee commitment and driving overall company performance.
  • Utilizing financial arbitrage through acquisitions at lower EBITDA multiples allows for significant returns and strengthens market position through synergies.

Deep dives

The Barbell Structure of Business Operations

The company operates on a unique 'barbell' structure that balances sales and marketing on one side and logistics and distribution on the other, with IT, accounting, and food safety holding it together. This shared service platform has evolved since its inception in 2018, where its costs represented 6% of sales; now, with a tripled investment, it has been reduced to 3%. This strategic focus on enhancing the operational backbone enables the company to pursue a robust acquisition strategy while efficiently managing costs. Through this framework, they aim to generate synergies that maximize overall business value.

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