Maximize Your Company’s Value with a Buy-and-Build Strategy

16/04/2025

If you're considering selling your company or looking to increase its long-term value, the buy-and-build strategy could be your greatest asset. This model is based on the targeted acquisition of smaller, high-value businesses to create synergies, consolidate markets, and multiply growth opportunities.

Why Buy-and-Build Increases Valuation

The buy-and-build strategy is especially popular due to the numerous benefits it offers:

Economies of scale and cost savings: Each acquisition helps pool resources, improve margins, and increase the company's critical mass.
Diversified revenue streams: Reducing dependence on a single market or product makes the business more resilient—an attractive trait for investors.
Enhanced competitive position: Acquiring competitors or complementary players helps secure market share and boost strategic value.

Keys to a Successful Buy-and-Build Strategy

For this strategy to succeed, several critical factors must be managed effectively:

Clear strategic vision: Choose targets aligned with your core business to maximize integration and synergies.
Effective integration: Align teams, processes, and corporate cultures to fully capitalize on acquisitions.
Optimized financing: Balance growth and caution by using mechanisms like LBOs to limit risk while boosting profitability.

Anticipate the Risks

Careful management is essential to avoid potential pitfalls, such as:

Non-strategic acquisitions that dilute value.
Poorly managed debt accumulation.

A Success Story

Partner in Pet Food (PPF) is a European pet food manufacturer headquartered in Hungary. PPF was acquired by Advent in 2011 before being sold to Pamplona Capital Management for €315M in 2015.

In April 2018, the investment fund Cinven acquired PPF for an undisclosed amount.

In the following years, PPF completed five strategic acquisitions.

These acquisitions enabled PPF to triple its revenue to €800M by 2023.

In June 2024, Cinven sold a majority stake in PPF to CVC Capital Partners, while retaining a minority stake, with the company reportedly valued at over €2 billion.

For inquiries or projects, contact us directly:
Lorraine Delannoy, Casteldoza Finance
📧 l.delannoy@casteldoza.com | 📞 +33.6.83.25.30.59