Need To Know About Buy & Build

What does Buy & Build actually mean? What requirements do I need to meet as an entrepreneur? At what points does it bring me forward and at what points is such a concept a big risk for me and my company. These are the questions I will try to answer today.

What is a buy and build concept?

Buy & Build means that a company (in our case our/your own company) serves as a growth platform. We are now building a group of companies on this platform. We buy companies as part of M&A buy side transactions. Ideally, always 100% of the business. This is our building material. This material is now being built with our own existing company. Construction is not complete until the purchased asset is seamlessly merged with the platform and functions as one entity.

What are the advantages of buy and build?

The advantages are obvious. The existing business can transition from organic growth to hyper growth. Through Buy & Build, an company can grow extremely fast. The growth of the company is sustainable because existing market players are bought in. As a result, the value of the company increases quickly and reliably. Organic growth flanks this concept and creates further substance.

What requirements do I need for such a concept?

First of all, every entrepreneur must look into the possibilities of such a strategy and clarify for himself whether he wants to grow up quickly. A Buy & Build concept requires clear corporate structures and processes. Many new employees join the company very quickly. The company must be able to deal with this. It must be prepared that purchased companies must also be integrated. Buying is easy, integrating brings cash flow.

What are the risks of a buy and build concept?

M&A transactions are cost-intensive. The company needs professional advice and support. Lawyers, tax advisors, M&A consultants cost money. The transaction is mostly financed. The risk of default is latent. The concept and each transaction must be well planned. Once a target is bought, the target’s employees should stay on board. Nothing is worse than having paid money for a thought construct or machines that no one operates. The same applies to the customers. They should not change partners because of the acquisition.

A good Buy & Build concept needs a precise preparation. Here, eightM offers different levels of service readiness. From the first readiness check to the provision of an M&A team, which acts as an external M&A department of the client. Contact us. We will show you how to realize hyper growth.