Buy & build
A buy & build strategy can play a vital role in your company's growth ambitions. By acquiring and integrating complementary businesses, you can create a larger and more competitive company. With this, you can achieve greater synergy and greater efficiency that are often not achievable for the companies individually. Hogenhouck helps entrepreneurs with a well-defined buy & build strategy and finding the perfect match for your growth ambitions. Want to know what a buy & build strategy can add for you and your company? We are happy to discuss this with you.
Het aan- en verkoopproces het overwegen waard?
Before you start thinking out a buy & build strategy, it is useful to have a good picture in advance of a number of important issues such as the market position of your company, whether there are any valuable takeover candidates, the state of financial stability of your company and the quality of your management team. We have built a strong track record in assisting entrepreneurs with determining their position and a realistic buy & build strategy. We are happy to share our knowledge and experience to guide you through a successful buy & build strategy.
Wat is de meerwaarde van buy & build?
A buy & build strategy will be successful if the value of the combined company is more than the value of the individual companies added together; this is often summarized in the M&A world in the term "1 + 1 = 3." The following aspects are important to achieving such value creation:
A well-nigh natural succession
A management buyout is a natural way for business succession. After all, you have built your company with a strong management team that knows the company inside out and helped build it. So it makes sense to consider business transfer to your MT. Are there people in your company who stand up and are interested in acquisition? Do the incumbent managers have enough entrepreneurial blood? And is it financially manageable? The business transfer doesn't always have to be about the highest price. You want to help your successor(s) in the saddle, but of course you also want to monetize some of the accumulated wealth. A decision for a management buyout is therefore often a mix of price, feeling, click and favor factor.
Margin improvement
Combining businesses can create economies of scale that can significantly improve your company's (profit) margin. Perhaps you can get volume discounts from your key suppliers, you need fewer people to achieve the desired turnover, certain functions can be used more efficiently or you can work more efficiently by purchasing new technology. These are all examples of economies of scale that you could realize with a buy-and-build strategy.
Multiple arbitration
As a larger and more diversified company, your business is usually valued higher than the smaller acquisition candidates you have your eye on. This is often expressed as so-called "multiple" for company valuation. After an acquisition, your acquisition candidate's multiple grows to the level of your company. The difference between the two multiples and the resulting increased valuation of the acquisition candidate is called 'multiple arbitrage' in the financial world.
Multiple expansion
By effecting the buy & build strategy, your company becomes larger and more diversified. The risk profile of the company decreases because of, for example, the larger customer base, the lower dependence on certain employees and the increased quality of your product and services. This has a positive impact on the multiple people are willing to pay for your company compared to before the buy & build; this is called "multiple expansion.
Een buy & build strategie weet waar je aan begint
Does a buy & build strategy have only advantages? Of course, a buy & build path is not exclusively rosy, but it offers numerous opportunities. You just have to think carefully about whether it suits you. While not every entrepreneur has the ambition to manage a larger company, it is important to recognize that it can be a logical step for business growth. As an entrepreneur, it is crucial to choose what best suits you and what motivates you.
Waarom private equity?
Een vorm van risicospreiding bij een buy & build traject is het samenwerken met een private equity partij. Hiermee spreid je het financiële risico en haal je kennis aan boord van een partij die al vaker met dit bijltje heeft gehakt. Private equity partijen kunnen jou helpen met het verder uitstippelen van je buy & build strategie, de overnames en de integratie van de overgenomen bedrijven. Voor het samenwerken met een private equity partij in de buy & build strategie zijn er twee hoofdcategorieën te onderscheiden:
Private equity platform
Private equity parties are always interested in new platform investments. These are companies with a strong financial profile, good management and a leading market position. If you, as an entrepreneur, want to set your own course and have a clear vision of how you want to shape a buy & build, you probably prefer to act as a platform for further expansion of your company.
Private equity add-on
Private equity parties are always interested in new platform investments. These are companies with a strong financial profile, good management and a leading market position. If you, as an entrepreneur, want to set your own course and have a clear vision of how you want to shape a buy & build, you probably prefer to act as a platform for further expansion of your company.
What do we want to do for you?
Private equity parties are always interested in new platform investments. These are companies with a strong financial profile, good management and a leading market position. If you, as an entrepreneur, want to set your own course and have a clear vision of how you want to shape a buy & build, you probably prefer to act as a platform for further expansion of your company.
Why sell a business? What do you want to achieve?
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