Buy and Build Strategy
A successful buy and build strategy can be the key to creating scale, resilience and unlocking growth, no matter the economic backdrop.
In fact, LDC portfolio companies acquired 65 companies in 2021. UK telecoms provider Onecom strengthened its portfolio with the acquisition of 9 Group companies and Olive Communications, while transport management software specialists Mandata added Stirling Solutions to their group. Engineering firm Stuart Turner also grew significantly, both organically and through acquisition since LDC’s investment, including the addition of Mikrofill Systems.
What is Buy and Build?
Buy and build is when a company acquires rivals or complementary firms, creating a business that is more than the sum of its parts. It has become a popular way to create scale and resilience.
A buy and build strategy can help management teams to achieve a variety of different objectives, whether it’s to expand geographically, diversify a product and service offering or further consolidate market share.
International Expansion and Diversification through Business Acquisition
Scaling internationally is an ambition for many businesses, and a buy and build strategy can help to achieve this by acquiring established operations in target markets. During our four-year partnership with global healthcare communications agency Lucid Group, we supported the management team to launch into new markets in Singapore and Dubai and add to its established presence in the US.
Business leaders looking to increase their customer base through diversifying or expanding products and services can achieve this quickly and effectively through the right buy and build strategy.
Unified communications and cyber security business Babble acquired six complementary businesses during the first three years of our partnership. The acquisitions increased turnover by 230% to consolidate the company’s market leadership.
Whatever your objective, well executed acquisitions can be an effective way of creating resilience and growth, even in difficult times. You know your market and likely potential acquisition targets – but in addition to the funding, the integration of other companies into your business and the transaction itself requires specialist M&A expertise.
Our Experience with Buy and Build Private Equity
Our ongoing partnership with lettings and estate agency Lomond Group is a great example of a management team driving domestic expansion through acquisition with the support of a private equity partner.
Before backing the merger of Lomond Capital and Linley & Simpson in January 2021, LDC helped Will Linley and his team to grow his business through an ambitious acquisition strategy across the Yorkshire region – making 18 bolt ons and doubling its portfolio from 5,000 to 10,000 properties in three years.
Lomond went on to acquire 24 new businesses in 2021, further tripling its portfolio to 30,000 properties – proving that buy and build is not just a fair-weather strategy.
Each acquisition has been a strategic and geographical fit for our existing footprint. They have been completed across all our key heartlands – from Aberdeen to Brighton, and many other towns and cities in-between.”
- 65 acquisitions made by LDC portfolio companies in 2021
- >⅔ of LDC portfolio businesses are on an acquisitive growth strategy
- £100m of LDC funding (initial and follow-on) available to each portfolio company
Having backed management teams for over 40 years, LDC is well-versed in supporting buy and build strategies and we’re actively looking for new opportunities.
With £100m available to each company we invest in, we provide follow-on funding to help you to make strategic business acquisitions happen. Our broader team can also provide extra support with integration.
Find out what it’s like to partner with us.