Buy-and-Build as a Growth Strategy for the Mid-Market

What is Buy-and-Build?

Buy-and-Build is an acquisition strategy where a platform company grows through targeted add-on acquisitions within its industry. The goal: creating a larger, more competitive entity with scale effects and a stronger market position.

Prerequisites for a Successful Strategy

The Right Platform Company

The foundation of any buy-and-build strategy is a solid platform company with a proven business model, strong management, and scalable infrastructure.

Fragmented Market

Buy-and-build works best in fragmented markets with many smaller providers – typical examples include IT services, facility management, and healthcare services.

Integration as a Core Competency

Success stands and falls with the ability to efficiently integrate acquired companies. This includes clear processes, cultural sensitivity, and a dedicated integration team.

Value Creation Levers

1. Revenue synergies through cross-selling and an expanded service offering
2. Cost synergies through consolidation of back-office functions
3. Multiple arbitrage by building a larger entity commanding a higher valuation
4. Market power through a stronger negotiating position with customers and suppliers

Conclusion

Buy-and-build is not a strategy for quick wins but a long-term approach to building market leadership. With the right planning and execution, mid-market companies can sustainably strengthen their competitive position through targeted acquisitions.

NORDVISORY advises you on developing and executing your buy-and-build strategy.