MR ANDY Koh, founder and managing director of DeskRight, a top office stationery distributor, wanted to triple the company's sales but was concerned about achieving the goal through mergers and acquisitions (M&A).
"We were growing at an annual rate of about 5 per cent, and the company was ready to go to its next phase of expansion," the 51-year-old says, referring to performance in the past few years. "But I was quite sceptical because I knew that nine out of 10 M&A deals aren't successful."
Late last year, DeskRight, which has 54 employees, approached Spring Singapore for help.
Tapping a grant from the agency, DeskRight engaged consultants to evaluate its financial and business health. The process, which took about three to four months, shed light on the company's growth options. The consultants also implemented an M&A readiness checklist for DeskRight to help assess potential acquisition targets.
The outcome of the initiative eased Mr Koh's concerns. "The process gave me a very clear indication that, financially, this was the way forward. The consultants did not confine their work to the project; they provided a lot of value-added advice, which assured me that it would be the right direction to take, with the right candidate, and the right cost and benefits profile," he says.
DeskRight, incorporated in 1996, was formerly a unit of SD Engineering, a precision engineering company.
Following the Asian financial crisis of 1998, the engineering business went bankrupt and as many as 30 staff members departed from the company, leaving behind Mr Koh and his storeman.
"That was easily the toughest period of my life," says Mr Koh, recalling that his then five-year-old son and his wife would help with the packing of stationery in the office on weekends. "There was no turning back for me at that time because I had sunk in all of my savings into the business. I told myself I shouldn't give up," he says.
In 2007, he changed the company's name from SD Engineering to DeskRight.
Going forward, Mr Koh hopes to be able to list the company on the stock exchange.
"That has been my decade-long dream. I hope we can achieve it in five years' time."