Building a repeatable acquisition model
In our experience sustained buy‑and‑build success comes from the deliberate creation of an acquisition strategy that prioritises efficiency, consistency, repeatability and pace. The more the whole approach, from first contact with a prospective target, is designed and executed with the intentional purpose of being duplicable on a deal by deal basis the higher the likelihood of achieving success in delivering acquisition volume at the desired rate.
The most effective repeat acquirers invest early in standardised processes and documentation, well-resourced internal deal support and establishing clear house positions coupled with decision‑making guidance and authority, then adhere consistently (as far as is possible) with that playbook. Deals will always have their particular points and quirks, and creativity and flexibility as essential in mid-market M&A as in any part of the transaction marketplace, but investing in targeting greater consistency does bear dividends where multiple acquisition models are concerned.
It is also important to recognise that a mid-market by-and-build program will involve a high percentage of transacting with privately owned, often owner-managed businesses. Dealing with individuals who may or may not have M&A experience and understandably may be engaging in a financially life-changing and personally immotive event requires an approach tailored to that audience. It also requires presentation of a terms, including as to structure, which both appeals to and works for them, including as to value delivery and tax consequences but also in all other respects.
In often competitive market-places moving with, or ideally ahead of, the market is necessary in order to unlock opportunities and sometimes to bridge price expectations. The prevalence of earn-outs after COVID to address the promise of success but absence of demonstrable track record and the increasing use of W&I insurance in the mid-market would be obvious recent examples.
It is also important to recognise that a mid-market by-and-build program will involve a high percentage of transacting with privately owned, often owner-managed businesses.
And reputation also plays a decisive role. Targets, advisers and management teams talk. Acquirers known for moving decisively, honouring agreed timelines and avoiding late‑stage re-trading consistently will find that future deals become easier to execute. Over time they also develop a bank of ambassadors, in target sellers and management teams who have enjoyed a good deal and post-deal experience, who will be invaluable in spreading the right message, demonstrating credibility and ultimately forming a key sales role.
Finally, attention to integration and bandwidth to achieve it is critical. Acquirers that underinvest in central functions (core portfolio company management, finance, HR, systems, AI, compliance and governance) can find that execution slows as scale increases but also that asset value is eroded as lack of integration is exposed. There is a model which involves rapid acquisition and consequential EBOTDA growth without thorough integration, which can be workable where exit to a more well-resourced acquirer is achieved early enough in the cycle, but that strategy should be handled with care.
The buyers that succeed in repeat acquisition programmes are those that remove friction from the process. Clear decision‑making, realistic timetables and consistency of approach materially increase the probability of completion and reduce competition over time.
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