Grow through acquisitions
Buy and build strategy - business growth through acquisitions
As an entrepreneur, you want to start growing. The buy and build strategy can play an important role in this by focusing on growth through acquisitions. On this page, we will first explain what a buy and build strategy is. Then we will explain why the strategy is so popular and how it works. Finally, we will discuss the main points to consider when implementing a buy and build strategy.
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Strategies for business growth
Business growth is essential for many organisations to achieve long-term success. Business growth is possible through two global strategies.
First, companies can grow organically. Autonomous growth, also called organic growth, means that the company starts to grow on its own. Autonomous growth can be achieved, for example, by intensifying marketing and sales activities, increasing production or expanding the service portfolio.
The second way is to grow through acquisitions. This strategy is called a buy and build strategy.
Grow through acquisitions
What is a buy and build strategy?
A company with a buy and build strategy is one that seeks to grow at an accelerated rate by acquiring other companies. Literally, therefore, it means ‘buy and build’. Multiple smaller companies are merged into one large company. While this strategy can be used to take over direct competitors, it can also be used to acquire sector-related companies in order to expand the range of services or products.
To clarify; the ultimate goal in both cases is to strengthen market position and gain synergy benefits such as digitalisation, staffing, up- and cross-selling, cost savings and reputation. Growth through acquisitions is often made possible by private equity parties because of the available capital. Yet, growth through acquisitions can also be carried out without private equity.
”Match Plan is een organisatie die flexibel is, no nonsens en kan in korte tijd vooruitgang realiseren in een complex overnametraject ”
Walter van de Wege, CEO Happy Horizon Groep
Buy and build
Benefits and risks in growth through acquisitions
In recent years, we have seen an increase in companies growing through acquisitions. This is clearly reflected in the so-called consolidations currently taking place in various industries. Besides achieving growth objectives, acquisitions can be used to reach new markets and products and can generate favourable synergy effects. However, there are also risks involved in using a buy-and-build strategy and an expert approach is important.
The step-by-step process
A successful buy and build strategy
A successful buy and build starts with the analysis of one’s own company. Here it helps to answer questions such as; is the company capable of successfully integrating other companies and does it already have experience in this? What type of services should be added or what market do they want to enter? And does the market the company is entering offer sufficient acquisition opportunities? It should also be determined whether the company’s activities are scalable.
Buy and build
Financing a buy and build strategy
After mapping out your own company, it is necessary to consider whether the buy and build strategy can be implemented on its own or whether a private equity party should be involved. With a financially decisive partner, several acquisitions can be realised in succession. In addition, the knowledge and expertise of private equity in the field of future strategy and the organisational (re)structuring of a growing company is considered very valuable. A possible disadvantage may be that a private equity party usually wants a majority in the equity interest.
Acquisition consultant
Buy and build strategy acquisition advisor
Are you considering a buy and build strategy? If so, it is advisable to involve an acquisition advisor. Match Plan has extensive experience in assisting companies with this strategy. We guide this entire process from determining the strategy, finding the right parties to take over, conducting the negotiations, drawing up contracts and closing the financing with the possible involvement of a private equity party. Feel free to make a consultation:
