The proposed manufacturing portfolio is divided into three segments wherein significant opportunities exist for profitable growth. The industry segments are Automotive, Aerospace, and Packaged Goods.
Acquire One will acquire and operate firms that supply commodity and technology components to the automobile industry. A special emphasis will be placed on acquiring minority-owned suppliers. There were over 1,000 minority suppliers for the Big 3 (General Motors, Ford, Daimler Chrysler) in 2005 accounting for $16.4 billion in revenue. (See Exhibit 1). However, increasing globalization of the industry has created tremendous cost, quality and product differentiation pressures. The Original Equipment Manufacturers (OEMs) are rapidly abandoning domestic suppliers for lower cost suppliers in Brazil, China, and India. Domestic minority suppliers have not aggressively focused on developing lower cost manufacturing capabilities abroad or pursuing partnerships and joint ventures abroad. Acquire One’s members have a successful track record in generating profits in a variety of automotive manufacturing niches. Furthermore, Acquire One has been proactively developing low cost manufacturing capabilities and partnerships abroad and is positioned to assume significant market share.
The competitive dynamics within the aerospace industry are consistent with the automobile industry. Although each industry employs slightly different manufacturing approaches, the similarities within the industries can generate substantial synergies. Approximately 500 U.S.-based companies were involved in the manufacture and sale of aircraft within the US accounting for $171 billion of revenue in 2005. Boeing Corporation estimates that the commercial aviation support services market will be worth about $3.3 trillion over the next 20 years, with annual revenues considerably more than that for the new airplane market (see exhibit 2). Similar to its activities within the automotive industry, Acquire One will acquire and operate firms that supply commodity and technology components to the aerospace industry with a particular emphasis on minority-owned suppliers. These suppliers are making steady gains in revenues and market share within the aerospace industry. The U.S. Department of Defense (“DoD”) is one of the primary purchasers of aerospace components and technology. Similar to the automotive OEMs, the DoD is pressuring suppliers to lower their costs. Acquire One has been proactive in developing low cost manufacturing capabilities and partnerships abroad and is positioned to acquire market share in aerospace manufacturing.
The U.S. packaged goods manufacturing market was approximately $2T in 2005. Revenue for unprocessed packaged meats was $54 billion, soft drinks were $96 billion, and snack food was $229.5 billion. These segments account for almost 19% of total US packaged goods market (See Exhibit 3). Acquire One will acquire and operate firms that produce packaged meats, soft drinks and snack foods. The combined growth in these industry segments is 5% annually, according to Packwire.com. There are significant opportunities within several minority market segments for new branded products that reinforce healthy living and ethnic pride. Acquire One will pursue a multiple alternative strategy approach including: 1) Partnering with established regional brands to expand market penetration; 2) Establishing new competing brands and leveraging existing manufacturing capacity; and 3) Procuring regional brands and adapting them to new markets. Acquire One has identified several acquisition opportunities within the soft drink and snack foods segments.
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