More effective access and approaches for buy & build concepts
"Smaller companies in the construction industry are often happy to hand over internal functions such as finance, tax and IT." - Patrick Seidler, Partner M&A at S&B StrategyWhat makes Buy & Build so challenging in the construction and construction supply industry?
Depending on the sub-segment and turnover size, the customer structure can be rather small-scale with a strong focus on the previous owner. In the majority of cases, there is little to no experience with the addition of shareholders and their information requirements. In addition, the level of professionalisation, particularly with regard to processes and digitalisation, is rather low.
So what is particularly important for buy & build in the construction sector?
In order to be successful in the long term and create a real competitive differentiator, targeted integration is essential. Smaller companies in the construction industry in particular are often happy to hand over internal functions such as finance, tax and IT and instead concentrate fully on customer processing on site. In our experience, it is also important to select the right region for the respective sub-segment and to achieve a regional balance within the group.
How can investors identify attractive add-on candidates and win them over?
Defining the region, desired skills/specialisations of the company and the customer structure at the outset is important in order to efficiently identify suitable candidates. In our view, it is essential to emphasise the concrete, sustainable added value for the company in the group in the approach and follow-up discussions - often a much more exciting argument for locally rooted entrepreneurs than the purchase price, especially against the background of overarching consolidation trends in the entire construction industry.
Your contact person
Patrick is a founding partner of S&B Strategy GmbH and is responsible for the M&A division.
With over 12 years of experience as a managing director, consultant and manager focussing on corporate and investor acquisitions, he is a proven expert in M&A – both for buy- and sell-side mandates. Patrick gained extensive experience in the deals division of PwC, on the management board of Hubert Burda Media and in the context of M&A and strategy projects for national and international clients in Europe and Asia. Patrick completed his Master’s degree in Business Administration at the Amsterdam Business School.