Michael Curry and Keith Burns relaxed into their late Friday routine, recapping their company's week and planning the next. That August 2018 afternoon, they also considered a larger question – whether a strategy of serial acquisitions was the best way to grow their company in the future.
Four years earlier they had acquired Krueger-Gilbert Health Physics, Inc. (KGHP), a full service, comprehensive diagnostic medical and health physics consulting company, using a search fund vehicle to finance the investment. Burns and Curry were both pleased and proud of their experience with managing KGHP. After facing some initial challenges, the company was stable and growing organically.
Burns and Curry had already expanded KGHP through the acquisition of two similar firms in their region. In addition, four months earlier KGHP had initiated its third and largest acquisition, Virginia Beach Consultation Company (VBPCC), another provider of diagnostic and health physics support in the region. Operational integration was on track as was financial performance, despite some cultural challenges with fitting the two teams together.
In their wide-ranging Friday conversation, Burns and Curry considered whether making more acquisitions could be a tenable growth strategy for KGHP. They had observed that consolidation strategies had worked in multiple industries, but also that some attempts at consolidation had failed spectacularly.
As the afternoon grew to a close, Burns and Curry pondered many questions about the firm's future. After four years of leading the firm, they still felt a bit like rookie entrepreneurs. Could, or even should, KGHP take on an additional expansion and acquire another firm? Had they and the firm developed the necessary operating experience?
They also mulled over the strategy of serial acquisition as a longer-term approach. What were the risks inherent in the plan? Did growth by acquisition just seem more glamorous than a laborious organic growth plan? Would the strategy really create value for shareholders, customers, and team members? Curry and Burns thought about why some serial acquisition companies thrived and why some just fizzled and collapsed. What were the factors that led to success?
Publication Date: 2019-09-03
Suggested Citation: A.J. Wasserstein and Jason Pananos, "Krueger-Gilbert Health Physics: Can a serial acquisition strategy work for a diagnostic consulting firm?" Yale SOM Case 19-014, September 3, 2019
Keywords: Minority entrepreneur, Nuclear medicine
Teaching Notes: No