Some 65 years ago, in an area of the Syrian desert now occupied by Islamic State fighters, a future billionaire was born. Mohed entered this world in poverty as part of a Bedouin tribe; his mother died soon after he was born and he had to fight to be allowed the basic privilege of attending school.
As tales of overcoming adversity go, Mohed Altrad's has to be one of the greatest. He has grown from an unknown Bedouin child into a billionaire business buyer with some 170 companies under his control. This year he took the title of 2015 EY World Entrepreneur of the Year and confirmed his place on the global business stage.
Mohed Altrad
Awarded the title of EY French Entrepreneur of the Year in 2014, in June 2015 Altrad went on to be named as the World Entrepreneur of the Year, taking the top spot out of a line-up of 52 entrepreneurs put forward at the award ceremony in Monte Carlo.
Upon accepting his award, Mr Altrad urged businesses and entrepreneurs to help people: “Companies are not just there to generate money year after year and then you become a billionaire – this is not the objective. The objective of life is to help humanity.”
His acceptance speech is representative of his broader business views and this human angle has played a vital role through various stages of his business and its acquisition-driven growth to make the man and his company what they are today.
Altrad's journey to take his place on the global business stage is truly inspirational on both a personal and a business level.
Bedouin Beginnings
Born in the Syrian desert a Bedouin, Altrad reckons he is around 65, although he doesn't know his age for sure. His mother died around the time of his birth after witnessing the murder of his elder brother by his father, leaving Mohed to be brought up by his grandmother. His was an uncertain start in life
Through persistence, he eventually convinced his grandmother to allow him to go to school, where he excelled, overcame his obstacles and found himself awarded a place at a university in Kiev; which later became a place at university in Montpelier, France, after being told the Kiev course was full.
Despite arriving in France unable to speak the language, he secured himself a PhD in computer science before going on to become a French citizen with employment at several major French businesses and a position with the Abu Dhabi National Oil Company.
And here's where his finances began to show a hint of the billionaire he was to become.
Working in the oil business, Mohed Altrad found himself in that most unusual of positions in which one has a high income but not a lot to spend it on. He saved hard and nurtured his dream of one day taking charge of his own future as an entrepreneur.
The opportunity presented itself when he returned to France and co-founded a business making portable computers. He promptly sold the company and found himself with sufficient capital to make his first acquisition. Mohed bought a small French scaffolding business with a partner. The pair paid just one franc for a business in dire need of a turnaround strategy if it was to avoid complete collapse under the weight of its liabilities. So began the transformation of the company into the Altrad that we know today.
Early Acquisition Strategy
Mohed Altrad proved to be the man for the job, he gave the business his name and quickly set about putting it on the track to health and growth. This was a business with serious problems, reportedly haemorrhaging money when he took it on, but Mohed had a long-term acquisition strategy in place. He knew that the company had a core service for which there was a demand; even with this first acquisition, Altrad knew that people and their needs and desires in life are a vital driver from both sides of the acquisition fence.
He shored up the distressed business, acknowledged the simple fact that its core service will always be something people need, and set about expanding what he had to offer with services that complemented the core scaffolding sale.
To this day Altrad attributes much of his business success to his first distressed company acquisition. “It gave me much added value, that I invested in the scaffolding company in bankruptcy”.
Expansion became the overriding strategy and acquisitions were Altrad's chosen method, but always with a clear focus on what people needed. What else would someone in need of scaffolding be on the look out for? Cement mixers, wheelbarrows, ladders … other companies offering similar basic but essential construction services began to be snapped up by Altrad as the company capitalised on the fragmented local industry to unite their services; a strategy that has continued to work to this day on an international level.
The Hertel Acquisition
In March 2015, Altrad entered into a binding agreement to buy Hertel's access, corrosion protection, insulation and mechanical businesses in a deal with a total enterprise value of around €230 million (£164 million).
The decision to make the acquisition was once again born out of the acknowledgement of complementary areas of service. Hertel and Altrad were very closely aligned on many planes; their customer base, geographical regions of operation, products and services all complement each other perfectly, offering both businesses the opportunity to work together in order to increase their presence in Europe and attract multinational customers who are looking for integrated solutions.
At the time of the agreement, Mr Altrad commented: “We consider Hertel a promising and exciting company with an attractive long-term growth potential, solid management and corporate values very similar to Altrad.
“Combining management teams with different sets of experience will enable us to actively exchange ideas and best practices thereby making the combination a benchmark in its industries.”
Tellingly, however, the deal was also pushed as being an excellent outcome and route to growth for Hertel.
People First
Hertel is the latest business to join the Altrad 'umbrella'. The company operates 170 businesses under its name, employing some 17,000 people and generating £1.3 billion in turnover with almost £130 million in annual profits. It's clear that in the 30 years Mohed Altrad has run the business, he and his colleagues have learnt a thing or two about successful business growth and acquisition strategies.
One point on strategy that crops up again and again in interviews and public announcements made by the man himself, is the value of people. In a recent BBC interview he said: “I am trying to develop a humanistic venture to make the people who work for me happy. If they are happy, they are more efficient, better performers, they have a better life … If I am happy, I work well.”
When it comes to his successful acquisition strategies, it's worth noting that Altrad takes his 'people first' approach a stage further: “A company is an identity, a piece of history; its products, clients.
“The general tendency of big groups like us is to reshape [the companies they buy] and make them more or less standard. This is absolutely against my concept.”
Altrad holds so much belief in his approach that he has written numerous books, both fictional and non-fictional on business tactics and morals. Some of these have been held in such high esteem as to make it into the French national curriculum.
His work, in business and elsewhere, is a triumph of application of thought; there is no clever trick to Altrad's methods - his trademark approach is to understand the real value of a target business and its people, followed through with the simple application of experience. But perhaps it takes the example of Mohed Altrad's extraordinary life experiences gathered on his journey from Bedouin to billionaire to prompt business buyers to truly apply thought to the people in their companies and target acquisitions.
It really is simple stuff to just acknowledge and respect the ethos of a company, as Altrad says: “If you are interested in a woman and your first reflex is to say don't dress like this, don't use this make-up, then what are you doing? It is precisely the same thing when you buy a company.”
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