Buy-and-build: how an SME grows through acquisitions

How buy-and-build works

The platform. It starts with a profitable business with a good reputation and management that wants to grow. It forms the core of the group.
The add-ons. Smaller firms from the same industry join, often from the region or with a speciality that is still missing. Many of them face a succession.
Working together. What is organised jointly is mainly what customers do not see: purchasing, accounting, IT, recruiting and training. Locally, the businesses remain independent.
Growth. With more locations and services, the group wins larger customers and contracts, and employees have more opportunities to develop.

Why it works in many industries

Buy-and-build suits markets with many small, regionally rooted providers and recurring demand, such as building technology, skilled trades, healthcare services and industrial and infrastructure services. Three developments come together there:

Many owners are looking for a successor. In Switzerland, according to Dun & Bradstreet, more than 90,000 SMEs are.
Customers want more from a single source and reliable partners with enough capacity.
Skilled workers are scarce. A larger group offers training, career paths and security, and finds staff more easily.

What owners gain

Your situation	What buy-and-build brings you
Your business becomes the platform	Capital and experience for acquisitions, a bigger role for you and your team. Through your stake you share in the value of the whole group.
Your business joins as an add-on	A settled succession, the name and team stay, and you can invest in the group.
For your employees	More secure jobs, training and new roles in a growing group.

What matters

The right platform. Strong management matters more than size.
Discipline on price. Every add-on has to make sense on its own, not just for the size of the group.
Integration with a sense of proportion. Do not standardise everything. What works for customers stays.
The people. The owners of the acquired businesses stay involved and take on responsibility in the group.
Solid financing. Enough equity for the group to get through a weaker year in good shape.

The examples under Experience show how such groups have been built in practice. Kevin Elsässer worked on them on the investor side during his time at Ufenau Capital Partners.

Frequently asked questions

What is the difference between a platform and an add-on?

The platform is the first and usually the largest company in the group. Add-ons are the firms that join afterwards. The platform’s management often takes on tasks for the whole group.

Do acquired businesses keep their name?

Usually, yes. Customers trust the familiar local name. What is organised jointly is mainly what customers do not see, such as purchasing, accounting or IT.

Which industries is buy-and-build suited to?

Markets with many small, regional providers and recurring demand, for example building technology, skilled trades, healthcare services and industrial and infrastructure services.

How many acquisitions per year make sense?

More important than the pace is that every business is integrated well. For a young group, one to three add-ons a year is a healthy pace, later more if management and structures grow with it.

This page provides general information and does not replace individual legal, tax or financial advice. Our disclaimer applies. This English version is provided for convenience; in case of discrepancies, the German version prevails.