Acquiring for Long-term Value Creation:A Case Study at Entreprenörinvest : “How does the entrepreneurial process regarding local direct investments impact the creation of long-term value?”

Abstract: Abstract: Background: In the southern areas of Sweden, around the birthplace of household brands such as IKEA, Peab, and Husqvarna, widespread entrepreneurial ventures have grown and seen their first few years of success. Alongside our collaborating private equity firm Entreprenörinvest we are trying to further expand the knowledge and descriptive concepts of what makes these entrepreneurial ventures successful. Purpose: The thesis builds on our pre-existing idea of developing research that would aim to bring the research fields of management and finance together while examining literature taught during our bachelors’ program. The managerial and finance-oriented literature rarely explain equity transactions on a regional level, in smaller companies. M&A practices are useful when firms look for organic growth yet want to continue their growth journey at a sustainable pace.  Method:  A qualitative research method has been used together with case studies, and case interviews from our collaborating company.  Conclusion: This thesis is written in collaboration with the private equity firm Entreprenörinvest. The literature would suggest that a structure such as the Acquisitional Paradigm would be used since private investments have many unknown factors and risk possibilities. The Case studies predict certain concepts brought up by the Acquisitional Paradigm while explaining and defining the core idea or rather the philosophy of the investment. The research concludes that the aspects of the entrepreneurial process are more related to proper due diligence rather than relations and people involved in the transaction. However, the entrepreneurial process also roots itself in the knowledge and relationship between buyers and sellers. Usually, more entrepreneurial business owners tend to prefer investing alongside their pre-existing relationships.