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News & insights

Is a buy and build strategy right for me and my business?


If you are looking to rapidly expand your business, a buy and build strategy could be a game changer. Within this article we delve into the third part of our business growth series where we learn about the buy and build strategy and its benefits to you as an owner managed business (OMB).

Whilst private equity firms commonly use this strategy it is also a well-developed strategy for those SME’s looking to accelerate growth and maximise value. This strategy involves acquiring existing businesses and integrating them into your current portfolio to become more robust and more competitive within the marketplace. The idea is that you (as the acquirer) target those existing businesses which will add value to your portfolio.

Why would I want to develop a buy and build strategy?

The business you potentially target may possess attributes which would help to reach your company's goals and objectives and expand your business. For example, you may be looking to expand your offering by providing a regulated product or service and you have identified an entity which already has the required regulatory approvals.

Acquiring the target business may allow you to access or trade in different geographical areas. For example, acquiring a business in the North of England may give you access to a new market and customer base or acquiring a business overseas may allow you to trade in different countries.

The target business may have an attractive customer or order book or may offer different products and services which you would be interested in adding to your current business.

You may simply be looking to swallow up a competitor.

Things to think about:

·      What are the business objectives you are trying to achieve? How will the target add value?

·      How will the target entity fit into your corporate structure? Do you need to create a group structure?

·      Will you need to undergo a re-brand?

·      Have you done some initial due diligence on the target? Are they performing well?

·      Will the target business be a good cultural fit with your existing portfolio?

·      Can the current business afford the acquisition? Do you need to seek funding?

·      Do you and/or the current management team have enough knowledge of the target sector?

If you are considering acquiring another business to add to your portfolio, it is important to consider how each of your businesses will work alongside each other. For smaller businesses, it is important to do proper due diligence on one target at a time to ensure smooth integration that will add value to your business.

Need more information?

Get in touch if you would like to find out more about the buy and build strategy.

Is your business embarking on its next phase of growth and looking for specialist advisors to help ensure the value and growth of your business accelerates in the right direction? Our corporate team are experts in this area, and they provide clarity and understanding throughout the process, turning any complex legal problem into a simple solution.

Contact us on 0151 305 9650 or email for further information.

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January 25, 2024

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