Harnessing M&A for Strategic Business Growth
After the M&A surge of 2021 and subsequent fall off, activity in mergers and acquisitions back on the upswing. As of September 30, the total value of deals in 2025 has reached $2.8M, already surpassing the total from all of 2024 ($2.6M). With a little over two months left in the year, 2025 is also expected to surpass 2024 in terms of number of deals.
So how are firms making this happen? In this guide, we will break down strategies that are proven to drive growth and challenges to watch out for.
Key Takeaways
- M&A activity is on another upswing, with 2025 on track to surpass 2024’s numbers in both number and value of deals.
- Not all mergers and acquisitions look the same. There are seven different M&A strategies: horizontal, vertical, market entry, acquihires, roll-ups, cross-sector, and strategic partnerships.
- Success in M&A hinges on alignment and execution — cultural fit, leadership unity, clear integration planning, and a strong strategic rationale are critical.
- Being “M&A-ready” requires preparation: clean financials, aligned leadership goals, strategic capability audits, a skilled internal deal team, and early integration planning all help companies capitalize on opportunities quickly and smoothly.
Why Companies Turn to M&A
The most lucrative companies today have centered M&A in their growth strategy. Think Microsoft purchasing Hotmail, LinkedIn, GitHub, Skype, and Activision Blizzard, or Kroger scooping up Albertsons, Fred Meyer, Fry’s, King Soopers, and Ralphs, to name a few.
When looking to acquire a company, buyers are typically in one of two categories: strategic or financial.
Strategic buyers are motivated by how the acquisition will improve existing operations and align with the business vision long-term – gaining technology, access to new products and services, unique talent, or an expanded geographic market. (This article focuses on strategics.)
Financial buyers, on the other hand, are motivated by the potential returns of investing in a company – finding a company with growth development that pays off in 5-7 years.
7 Proven M&A Strategies That Drive Growth
Whether a company is looking to expand market share, accelerate innovation, or strengthen competitive positioning, M&A teams need the right acquisition strategy to deliver outsized returns. Here are seven common strategies that firms leverage.
1. Horizontal Acquisitions
Horizontal acquisitions involve acquiring a competitor within the same industry and at the same stage of the value chain. This strategy is primarily aimed at gaining market share, achieving economies of scale, and reducing competition.
By consolidating similar businesses, companies can expand their customer base, strengthen pricing power, and streamline operations. This approach typically works well in mature industries. Here are a few examples of successful horizontal mergers:
2. Vertical Acquisitions
In a vertical acquisition, a company acquires a business either upstream (suppliers) or downstream (distributors or retailers) in its value chain. The goal is to gain control over the supply chain, reduce dependency, and improve margins.
For instance, a manufacturer acquiring a logistics company can ensure faster delivery and reduce costs, while a retailer acquiring a product supplier can secure exclusive and efficient access to key inventory. Here are some examples of iconic vertical mergers:
3. Market Entry via Acquisition
Instead of entering a new market organically, companies will often acquire an established local player to fast-track the path to a new geography or customer segment while leveraging existing name recognition. This approach minimizes the risks and costs associated with market entry while instantly providing access to local expertise, customer relationships, and regulatory familiarity.
Global expansion through acquisition is especially popular in industries with complex compliance environments, such as finance and healthcare. Here are a few examples of M&A activity that helped companies enter new markets:
4. Talent & Tech Acquisitions (Acquihires)
Sometimes, the real value of an acquisition lies not in products or customers, but in people and technology. Known as “acquihires,” these less common deals allow companies to integrate specialized talent or proprietary technology that can accelerate innovation.
These transactions can occur when a start-up has failed to raise additional funding or to massage the optics of a founder leaving their own start-up to join another company. Examples of these mergers and acquisitions are most common in the technology space:
5. Roll-Up Strategies
A roll-up strategy involves acquiring multiple smaller companies within a fragmented market and consolidating them under one platform. This creates a larger, more efficient entity with shared resources, unified branding, and stronger bargaining power.
Typically spearheaded by private equity firms, roll-ups are especially common in professional services, healthcare, and niche manufacturing sectors. Here are some examples:
- Anheuser-Busch InBev acquired Budweiser, Corona, and Stella Artois
- Waste Management, Inc. famously acquired small, local trash haulers to become the largest American waste hauler in 1982
- Local veterinary clinics are popular roll-up targets, with companies like Mars, JAB Partners, and KKR acquiring hundreds of small practices under brands like MedVet Associates, VetCor, and VCA.
6. Cross-Sector Acquisitions
Cross-sector acquisitions — where companies acquire businesses in adjacent or entirely different industries — can be a bold move to diversify revenue streams and hedge against sector-specific risks. These deals often aim to create new synergies or access emerging growth areas. Check out these historic examples:
7. Strategic Partnerships that Lead to M&A
Not all growth begins with a full acquisition. Many successful M&As start as strategic partnerships, joint ventures, or minority investments. These collaborations allow companies to test compatibility, explore synergies, and minimize risk in the acquisition process before fully committing.
Over time, as trust and strategic alignment deepen, these partnerships can evolve naturally into mergers or acquisitions. Examples of strategic partnerships include:
- Toyota and Subaru began their relationship in 2012 by collaborating on the development of two sports cars, the Subaru BRZ and the Toyota 8. Toyota followed by increasing its equity stake in Subaru multiple times, evolving from a joint venture to a minority investment, and into majority ownership today.
- Google invested in the little-known Android in 2003, seeing potential in the startup software company. Google later acquired Android outright in 2005.
- Disney and Pixar began as partners in the 90s, with Disney distributing Pixar films like Toy Story and A Bug’s Life. After years of collaboration and shared success, Disney acquired Pixar in 2006, effectively setting the stage for Disney’s future M&A success.
What Makes an M&A Strategy Work (Or Fail)?
M&A deals promise growth, market share, and innovation — but they also carry risk. The difference between success and failure often comes down to strategy, execution, and alignment.
What makes an M&A strategy work:
- Cultural Fit
- Clear Integration Plan
- Leadership Alignment
- Strategic Rationale
Common M&A pitfalls to avoid:
- Overpaying
- Rushing Due Diligence
- Underestimating Integration Costs
- Neglecting People and Communication
How to Build an M&A-Ready Business
Whether you’re planning to acquire or be acquired, M&A readiness determines how quickly and effectively your company can capitalize on opportunities. Preparation builds confidence and credibility with investors, advisors, and industry professionals.
1. Get your financials in order
Clean, accurate financials make your business more attractive to potential partners and reduce friction during due diligence. Ensure your financial reporting, tax filings, and key metrics (EBITDA, cash flow, recurring revenue) are transparent and verifiable.
2. Align internal goals and expectations
M&A only succeeds when leadership and stakeholders share a unified vision. Clarify your strategic goals — growth, diversification, capability enhancement, or exit — and communicate them clearly across teams.
3. Conduct a strategic capability audit
Assess what makes your business valuable and where you have gaps. Understanding your core strengths helps identify the right type of partner or acquisition target.
4. Build the dream team
Your internal M&A team (finance, operations, legal, and HR) should be trained and ready to evaluate deals objectively. Partnering with external advisors can fill expertise gaps and provide perspective on valuation and integration.
5. Plan early
Even before identifying a target, design your integration framework: how would you merge teams, processes, and systems? Early thinking here accelerates post-deal execution.
Powering Your M&A Growth Strategy with Grata
Modern dealmakers rely on data-driven tools to identify, evaluate, and manage opportunities efficiently. Grata empowers dealmakers to discover the right companies faster with unique, proprietary data.
Here’s how technology can enhance your M&A process:
- Search deeper: Advanced capabilities and real-time proprietary data allow you to find hidden gems in fragmented markets with insights you can’t get anywhere else.
- Reach further: AI-driven platforms like Grata actively seek out similar companies to ensure you don’t miss a deal.
- Track effortlessly: With built-in CRM features and integrations, you can track targets, manage pipeline stages, and collaborate across your team in one centralized workspace.
M&A Isn’t a Shortcut — It’s a Strategy
M&A isn’t a quick fix or a magic bullet for growth. Success comes from preparation, patience, and precision: knowing what kind of growth you’re pursuing, why it matters to your strategy, and how to execute it effectively.
When done right, M&A can transform businesses by expanding capability, unlocking new markets, and accelerating innovation. The right strategy combined with the right tools ensures M&A deals align with your company vision for sustainable growth.
From in-depth market research to deal sourcing to pipeline management and relationship nurturing, Grata’s end-to-end dealmaking platform streamlines your workflows so that you make deals that make sense.
Schedule a demo today to get started.
