According to a recent study, Finnish small and medium-sized enterprises (SMEs) see international acquisitions as a fast, efficient, and highly recommended way to expand into new markets. The main drivers behind cross-border acquisitions are growth and increasing company value.
The study explored Finnish SMEs’ experiences with international expansion through acquisitions. The research included interviews with CEOs or board chairs of six companies, whose revenues ranged from €7 to €28 million and staff sizes from 50 to 140. All had acquired a majority stake in a Nordic, mainly Swedish, company between 2016 and 2024.
Careful preparation is key to success
Most of the companies interviewed were already well established in Finland and had some export activity. Acquisition was viewed as a quicker and lower-risk path to international markets compared to building operations from scratch. Through acquisitions, companies gained access to local market knowledge, customers, distribution channels, and skilled personnel. The presence of private equity investors with return-on-investment deadlines, as well as favorable market conditions, also influenced acquisition decisions.
“An acquisition can provide the necessary market presence, expertise, and established networks for international expansion. A well-executed deal supports strategic goals and generates significant synergies,” says Marianne Ruusunhelmi, business transfer specialist at the Federation of Finnish Enterprises.
Target companies were typically selected based on having an existing customer base, functional management, a well-known brand, and strong market insight. These companies were usually no more than half the size of the acquiring firm, making integration and risk management easier.
The acquisition processes typically lasted between one and three years. Financing was mainly secured through private equity investors or loans guaranteed by Finnvera, a state-owned specialized financing company. Consultants, investors, and business networks were used to identify acquisition targets.
Integration was most often carried out using a “best of breed” approach, combining the strengths of both companies. In some cases, the acquired company was initially kept as a separate unit.
Mixed but generally positive experiences
Acquired firms served as platforms for growth in the new markets. However, results varied: while many companies achieved at least the equivalent of the acquired firm’s revenue in growth, sometimes even exceeding market growth, some deals were too recent for outcomes to be fully realized. In a few cases, revenue declined due to challenging economic conditions or unsuccessful acquisitions.
Beyond growth, acquisitions also brought synergy benefits, greater volumes, improved credibility with export customers, and enhanced local customer service through established relationships.
The companies also saw positive effects on their domestic operations. International expansion enhanced their image as dynamic, growth-oriented businesses, strengthening customer trust and employer appeal.
Challenges were expected but manageable
The challenges of international acquisitions were not seen as insurmountable but did require significant resources. Aligning business models and systems, as well as managing the acquired organization, demanded time and careful planning. Expert costs were higher than anticipated, and the due diligence process was described as both demanding and expensive.
Cultural and language differences required adaptation but were considered manageable. Preparations included hiring Finland-Swedish staff, for example.
Requirements for successful international expansion
All participating companies would recommend acquisitions as an internationalization strategy and expressed willingness to undertake similar deals in the future. According to them, key factors for successful cross-border acquisition are:
- A clear and distinctive business concept
- Strong financial capital
- Committed leadership and owners
- Experience in acquisitions or access to external expertise
- Risk tolerance and willingness to invest before full certainty
- A strong brand and branding capabilities
Successful integration requires clear leadership and personal presence. Building trust among management and employees, developing shared practices, and continuous communication were highlighted as critical success factors.
“Leading an integration project isn’t something you can do on the side. You must allocate adequate resources and dedicated project management. The scope of change is almost always underestimated,” Ruusunhelmi emphasizes.
The study was carried out as part of the Federation of Finnish Enterprises’ project “Business Transfers as a Tool for Internationalization.” Interviews were conducted in March and April 2025.
Contact:
Marianne Ruusunhelmi, Business transfer specialist
Federation of Finnish Enterprises/Suomen Yrittäjät
marianne.ruusunhelmi@yrittajat.fi
+358 50 559 9225