I read Jamie Dimon (CEO of JPMorgan) emphasizing the benefits of organic growth at the expense of M&A:
“ Companies talk about acquisitions like that is what is going to save them. It’s not. What is going to save us is organic growth. Better products, better services, better bankers, better technology, hiring and training better people. Organic growth is harder and better than acquisitions. Most companies don’t do it because growing a sales force is hard. Opening branches is hard. Most people come up with a million reasons why they don’t do it.”
Hope investment banking division of JP and their clients will not hear this : ))
My view: When it comes to shareholder value creation, organic growth is a great way to deliver provide that the return marginal sales is high compared to the cost of marginal capital needed to fund the growth. However, bolt-on acquisitions also do create great deal of value if the targeting, valuation, transaction and integration is executed in the right way.
Instance? Look at the deals #Sika and #SaintGobain has been closing each year.