Interview with Ioana Marinescu, Vice President M&A at EMI Group
“The main advantage for founders joining our group is the opportunity to create a clear, structured future for their company. By becoming part of a larger story, they can take their business to the next level while preserving its unique culture and agility.”
1. EMI Group has ambitious plans for expansion. What are the key objectives behind this strategy?
EMI Group currently operates through a well-established network of four companies—two based in Romania (EMI and KADRA) and two in Belgium (Decran and Access Systems). Together, we serve a diverse and growing customer base of over 3,500 clients across various sectors, having maintained more than 50,000 access systems as of 2024.
Looking ahead, our strategy is focused on further strengthening our position in the European market. Over the next few years, we plan to consolidate the fragmented landscape within our industry, with an ambitious goal of executing six to twelve strategic acquisitions/onboarding of new companies in the group. These developments will primarily focus on markets in Central and Western Europe that complement and enhance our existing capabilities, allowing us to expand our footprint, broaden our service offerings, and ultimately deliver greater value to our customers.
Our goal is to leverage the collective knowledge within the Group to not only grow our market share but also integrate new technologies, processes, and expertise into our existing operations, ensuring that EMI Group remains at the forefront of the access system industry.
2. What are the advantages for founders who choose to join EMI Group?
The main advantage for founders joining our group is the opportunity to create a clear, structured future for their company. By becoming part of a larger story, they can take their business to the next level while preserving its unique culture and agility.
First, we prefer to speak about onboarding new companies rather than acquiring them, as founders become shareholders at the group level and benefit proportionately from the value created within the group, just like our principal investors. Additionally, founders who join EMI Group are able to de-risk their position and realise a portion of cash on day one, providing them with immediate financial rewards for the hard work and dedication that brought their business to this point.
Secondly, founders retain the operational autonomy they are accustomed to, continuing to lead their company’s day-to-day activities thanks to our decentralized model. At the same time, they gain support from successful industry experts who have vast entrepreneurial and corporate experience, as well as resources and structuring expertise from financial investors and the broader group, factors that can accelerate growth and open new avenues of opportunity.
Thirdly, best practices and processes are shared within the Group to help address structural challenges, improve competitiveness through better supplier conditions, enhance customer service, and drive growth, all within the dynamic, agile environment of the group.
With tailored support, a secure foundation for their work, and the potential for maximized financial returns, founders can fully engage in the growth of their company without sacrificing their role or vision for the full benefits of our customers.
3. Many founders have concerns about M&A. What are some of the most common fears and misconceptions?
Many founders, particularly those who have not previously navigated an M&A transaction, often experience some apprehension about the process. To help alleviate this, we invest significant time and effort in guiding them through the various stages, requirements, and documentation involved. Clear communication is key to ensuring they feel confident and informed every step of the way.
As regards myths, the list is long, but a few common examples are:
- M&A creates immediate value – In reality, M&A value creation can take years and, if not handled carefully and strategically, M&A transactions can actually end up damaging the existing value of a group.
- M&A is only a financial transaction – In reality, whilst financial considerations are very important, M&A is just as much a human and strategic endeavour. A successful deal hinges on managing relationships with founders, key stakeholders, and teams across both organizations. The best deals often come from aligning financial and strategic goals, innovation opportunities, and long-term vision.
- Due Diligence (DD) will uncover all the problems and highlight all the risks – In reality, whilst due diligence is an essential part of every transaction, there are factors that may not be immediately apparent or might arise post-transaction but relate to pre-transaction events. What is important to remember is that all companies have good and bad parts and unless the aggregate of the bad parts makes the business unviable, we will typically not walk away from a deal where red flags have been found in DD but, rather, work with the founders to solve these issues post-closing and derive further value for the business.
4. How does EMI Group determine the value of a company?
Enterprise value (EV) represents the total value of a company and reflects the combined worth of a business. This takes into account a multitude of quantitative and qualitative factors such as the company’s historical growth, customer base and market position.
To determine the enterprise value, we first analyse a company’s historical performance. This involves examining key financial metrics such as revenue, operating income, and EBITDA margins to gauge its financial health and ability to generate sustainable earnings over time. We also assess the company’s future outlook, how it plans to grow and whether its business model is positioned for continued success in the market.
In addition to these aspects, enterprise value is adjusted for financial factors like debt, cash, and changes in working capital. For example, the target’s debt represents an obligation that EMI Group would need to assume, so it is subtracted from the overall value. On the other hand, liquid assets, such as cash and cash equivalents, are added back into the equation, as they would reduce the net cost of acquisition. Similarly, any adjustments to working capital, which reflect the company’s short-term operational liquidity, are taken into consideration. This is to ensure that the enterprise value accurately reflects the business’ day-to-day financial health and ability to continue operationally in the medium to long-term.
Alongside these quantitative aspects, to arrive at the most accurate valuation of a company, we use internal methods focused on a mix of qualitative factors, including product and service offerings, client types and tenures, organisational structure and growth potential.
5. What are the key factors EMI Group considers when evaluating potential acquisitions?
When evaluating potential acquisitions, we have several key criteria that guide our decision-making process. First, the size of the target is an important consideration, and we typically have a minimum EBITDA threshold. That said, we maintain a degree of flexibility and may be open to making exceptions if the target offers a unique competitive advantage or presents highly synergistic attributes that align with our long-term vision.
A critical factor is the founder’s profile, as they need to align with our philosophy. At EMI Group, one of our key differentiators is the autonomy we offer to founders who join our network through our decentralized model. As such, a founder’s unwillingness to continue with the business is a deal-breaker for us.
Finally, cultural fit is absolutely vital and we have previously walked away from opportunities when we felt that the cultural alignment wasn’t right. EMI Group is built on the foundation of a growing network of owner-managed businesses, and ensuring that the target company shares our values and vision is essential for the long-term success of the relationship and of the Group. The right cultural fit fosters a shared sense of direction and ensures that everyone is on the same page as we move forward together.
