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Growth and Acquisitions

Growth Chart and Trend Line

Do you want outside capital? Don’t you want to be a much larger company? These questions were recently asked of me by a Partner at an investment fund that was interested in investing into ABS. The answer to the first question was No. The answer to the second was a qualified Yes.

A company can grow organically, through acquisitions, or a combination of the two. In the first case, growth is driven because clients value what the company provides. For 30 years, ABS has pursued this path and we have steadily grown. This growth is accelerating based upon the value that we deliver. In the second case, a company grows by adding on other companies to make a large entity. Often these add-ons are complimentary, but this is not always the case. The increase in size can drive up value for investors. Larger companies are often viewed as more valuable by investors or potential acquisitions simply because of size.

Why then, wouldn’t we seek outside capital and combine with other companies to be perceived as more valuable? The answer is that bigger is not always better for either clients or employees. ABS is already of sufficient size to serve our many current clients rapidly and effectively. Our scalable processes and systems are built for accelerated growth. However, our growth objectives are not to get bigger simply to be perceived as more valuable. Our mission states that ABS exists to create value for the research community, society, and ourselves. This means more to us than just getting bigger.

We will continue to grow only to the extent that we maintain the collaborative and responsive interactions with our clients and maintain our high standards of reliability. As we grow, we are looking for acquisitions, not from the perspective of increasing our size, but rather to build upon the value that we already provide. We will continue to enhance our core offerings. Complimentary services will either be through internal growth, as we have done, or by limited strategic acquisitions that do not dilute our focus and quality. More will be said of these plans in blogs over the coming year.

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