RMB Capital Partners is an acknowledged leader in Buy and Build growth partnerships, having concluded over 100 transactions in this investment style alongside its partners. Buy and Build typically comes in one of two forms:
The first is an investment into a “platform” business that is well established and ready to execute on an accelerated growth strategy. This strategy typically includes the acquisition of a number of bolt-on companies which are integrated quickly and easily into the strong platform.
Some of the key characteristics of a Buy and Build platform include depth of management team, flexible ERP systems, strong capability in core business processes and a proven M&A capability. A good example of this style of platform centric Buy and Build strategy would be Device Technologies which has executed a large number of bolt-on acquisitions to cement its clear leadership position in the high growth A/NZ healthcare market.
The second form of Buy and Build comprises several rounds of funding into a number of businesses in the same sector which are then brought together to form a strong platform. Early rounds of investment help establish the team, systems, processes and capabilities to ensure that growth is sustainable and that other companies can be easily acquired and integrated.
Later funding rounds (sometimes in the form of debt funding) help accelerate growth both organically (e.g. rolling out a new product-line or plant), as well as via value-enhancing bolt-on acquisitions (e.g. to enable the business to expand into a new geography or add new products / service lines). InteriorCo, now a clear leader in the Australasian office interiors industry, is a good example of this style of Buy and Build transaction.
Greg McDonell, CEOInteriorCo