Mercor (established in 1988) had been growing at brisk pace since the end of the 1990s. We were focussed on manufacturing our own product, as well as, sales and service. By 2004, we had annual profits of almost PLN100m - this is when we decided to build a capital group and to enter the stock market. Though, it would be another three years before we actually made it onto the Warsaw Stock Exchange. This decision was a defining moment in our development. Together with my co-shareholder, we realised we had to prepare thoroughly for this step. For this reason, we decided to introduce an outside investor right at the start in the form of a PE fund – Innova Capital.Our thinking was Mercor, which had to that time grown organically, was ready for expansion in the form of foreign acquisition. We had observed how other companies had gone down this road and read about similar instances in reports from the Harvard Business Review. However, it appeared in many cases this course of action ended badly when the company involved tried to go it alone.

It appeared though, if the takeover was instigated by a PE fund the success rate was much higher, almost 80%. PE funds are specialists in this type of transaction. We expected to learn a lot from this type of an investor, and we were proved right! The stock exchange gives us access to financial resources - while having a PE fund by our side gives us know-how. Success is the result of combining these two elements.

They helped us to redefine and enhance the strengths within our business model. At the same time, we learnt to value the importance of using figures and business targets when making management decisions. Innova instigated a new regime of financial planning and disciplined business practices.

Yes, definitely! Again, we have learnt a great deal from them: how to assess the market, how to research a potential target acquisition, how to analyse a strategic match between ourselves and other companies. All of these factors have to be taken in to account.An acquisition is a process of many stages. I am certain our mutual success was in due to, in equal measure, the closed acquisitions we made in Poland and Spain, as well as the carefully considered decision to step away from certain other takeover targets. The decision to say ‘No’ to some opportunities was the result of intense investigations by both teams from Innova and Mercor.

In the near future, our plan is to focus on improving Mercor’s efficiency as a group, once the takeovers are finalized. Next, we want to raise more capital for future acquisitions by taking advantage of discounted share prices currently available on the WSE. We expect this happen in Q4’09, with financing generated from Mercor’s cash flow.