Munro Footwear Group's chief product officer and board director, Bill Munro, shares his top tips for striking successful merger and acquisition deals (M&A).
Over the past 15 years, our group has grown predominantly through acquisitions, completing nine deals of varying size, complexity, and success – including New Zealand kids shoe brand Bobux and Accent Group's kids shoe retailer The Trybe most recently. These experiences have taught us valuable lessons about what makes an M&A transaction succeed in our fast-moving industry.
Here are my top tips for striking a successful deal:
1. Time kills all deals: Aim to complete the transaction as quickly as possible. Agree on key commercial terms before involving lawyers, and keep those terms as straightforward as feasible. Enter due diligence fully prepared and committed, but avoid unnecessary delays. The longer a deal drags on, the greater the risk it falls apart – whether due to shifting priorities, market changes, or fatigue on either side.
2. Momentum and motivation drive outcomes: Both buyer and seller must be equally motivated to close. Without balanced enthusiasm, no deal gets done. Maintain momentum throughout negotiations, and align on core commercial terms (including valuation framework) as early as possible. While price adjustments often occur during due diligence, having the foundational agreement in place upfront prevents derailment.
3. Be firm on price, but fair: A business is ultimately worth only what a buyer is willing to pay. Some acquisitions deliver greater strategic value to your group than to others – through synergies like infrastructure integration or brand complementarity – which can justify a higher price. Our acquisition of women's shoe brand Ziera in 2019 proved transformative: by leveraging our existing operations, we could pay more than competing bidders, and the brand has since gone from strength to strength. Crucially, neither party should walk away feeling disadvantaged. Fairness builds goodwill for future opportunities in our tight-knit industry.
4. Take a long-term view: Return on investment (ROI) remains critical in evaluating any acquisition, but if you plan to hold the asset indefinitely, extend your horizon beyond short-term payback. While we target a two-year payback on invested capital as a benchmark, we will pursue deals with longer horizons if the strategic rationale is compelling – such as sustained brand growth or market positioning. A 10+ year outlook often reveals true value that shorter-term metrics overlook.
5. Secure the right advice and a strong legal team: Acquisitions involve countless considerations: asset versus share purchase, liabilities, tax implications, employment transfers, and more. Build robust internal capability to evaluate options, but pair it with top-tier external advisers and lawyers experienced in retail and fashion/footwear transactions. Their expertise can prevent costly oversights and smooth complex negotiations.
6. The money is made in the buying: In every successful acquisition we've completed, value was created at the purchase stage. We've remained fair but disciplined on price – and we've walked away from numerous deals when valuations didn't align with our criteria. Resist the urge to overpay; attractive opportunities in our sector continue to emerge.
7. Expect the unexpected: Due diligence uncovers much, but surprises are inevitable. When we acquired the Mollini business from the Figgins group – an 11-store retail portfolio – we didn't anticipate that, immediately after settlement, the vendors placed related entities into administration. Landlords had back-to-back leases lined up, resulting in us being locked out of nine stores. What felt catastrophic at the time forced a rapid pivot to wholesale distribution. Today, Mollini thrives through David Jones concessions, Midas boutiques, online channels, and broader wholesale. The lesson? Deals are rarely as perfect – or as disastrous – as they first appear. Adaptability turns setbacks into long-term wins.
8. Enjoy the process: The deal phase is exhilarating: assessing the target, mapping strategic fit, planning integration, and envisioning post-acquisition growth. It's refreshing and energising. Once the ink dries, the real (and often harder) work begins – integration, cultural alignment, and execution. So savour the negotiation and closing stages – they're the highlight.
M&A has been a cornerstone of Munro Footwear Group's growth in the Australian footwear landscape. Approached thoughtfully, these deals can accelerate scale, strengthen portfolios, and create lasting value.