Buy and Build Strategy: Accelerating Growth and Transformation in Corporate Finance

4 mins

Posted on 30 Aug 2023

Buy and Build Strategy: Accelerating Growth and Transformation in Corporate Finance

In the evolving landscape of corporate finance, businesses are continuously exploring innovative strategies to drive growth, maximise shareholder value, and gain a competitive edge. One such strategy that has gained significant attention is the "buy and build" strategy.

This approach involves acquiring smaller, complementary companies with the aim of integrating and leveraging their resources, capabilities, and market presence to create a more substantial and competitive entity.

We have helped a number of clients with buy and build strategies and have created this helpful note from our experiences.

Understanding the Buy and Build Strategy

The buy and build strategy is based around the concept of inorganic growth – growth achieved through acquisitions – as opposed to organic growth which relies on internal expansion. Unlike a standalone acquisition strategy where a company acquires others for immediate synergies, the buy and build approach extends beyond a single transaction.

Instead, it entails a series of well-planned acquisitions over time, each aimed at enhancing the core capabilities of the acquiring company. Often a buy and build strategy aims to focus on accelerated growth, and a medium to long term exit.

Benefits of the Buy and Build Strategy

Rapid market penetration

Acquiring smaller, established companies allows the acquirer to swiftly gain access to new markets, customer bases, and distribution channels, thus accelerating its market penetration.


By strategically acquiring companies in related or complementary industries, the acquirer can diversify its product or service offering, reducing vulnerability to market fluctuations in any single sector.

Talent acquisition

Acquiring skilled personnel and management teams from target companies can infuse fresh perspectives and ideas into the acquiring company, driving innovation and growth.

Economies of scale

As the acquiring company grows through acquisitions, it can often benefit from economies of scale, resulting in cost reductions and improved profitability.


Key to buy and build strategies is the use of higher multiples in valuing larger businesses, effectively meaning that as a business grows via bolt on, its valuation can increase by more than the sum of the parts of the businesses acquired.

Challenges and Considerations

While the buy and build strategy offers compelling advantages, it also comes with its share of challenges that businesses need to navigate:

Integration complexity

Integrating multiple companies with varying cultures, systems, and processes can be complex and time-consuming, requiring careful planning and execution.

Financial implications

Acquisitions require significant financial resources. Businesses must ensure they have adequate funding, whether through internal resources, external financing, or a combination of both.

Risk management

The strategy exposes the acquirer to market uncertainties, regulatory hurdles, and operational risks. Diligent risk assessment and mitigation strategies are essential.

Strategic alignment

Acquired companies must align with the acquiring company's long-term strategic goals to avoid dilution of vision and direction.

Talent retention

The integration process can lead to talent attrition if not managed effectively. Retaining key personnel is crucial to realise the full benefits of the acquisition.

Tips for Businesses Pursuing the Buy and Build Strategy

For businesses looking to implement a successful buy and build strategy, here are some invaluable tips:

Clear strategy

Use a clear and well-defined acquisition strategy that aligns with your long-term goals and market position. Identify the industries and companies that complement your strengths.

Due diligence

Thoroughly research and assess potential acquisition targets. Evaluate their financial health, market presence, competitive advantages, and cultural fit.

Integration planning

Develop a detailed integration plan that outlines how acquired companies will be built into your organisation. Address cultural integration, operational alignment, and technology consolidation.

Financial prudence

Ensure you have a robust financial structure in place to support your acquisition strategy. Explore different funding options and assess the financial implications of each acquisition.

Talent management

Develop strategies to retain key talent in both the acquiring and acquired companies. Acknowledge their value and provide a clear growth path within the newly expanded organisation. Perhaps utilise equity incentives to ensure that talent is motivated and retained.

Flexibility and agility

The business landscape can change rapidly. Stay adaptable and be prepared to adjust your strategy based on market dynamics and evolving industry trends.

Low cost

Ensure that costs relating to acquisitions are kept to a minimum. This can be done by ensuring that due diligence is completed in-house where possible, whilst retaining advisers that can reuse previous acquisition processes and documentation for efficiency.

For further information on how we can support you with your growth strategy, please click here or, alternatively, contact a member of our Corporate team.

Liz Barton

Liz is a highly experienced lawyer advising companies and individuals on all aspects of corporate law, from advising on company constitutions and corporate governance matters, to group reorganisations and share and business disposals and acquisitions.

  • Partner & Head of Corporate
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Thomas Clark

Thomas is an experienced corporate lawyer who advises clients on matters including business sales and purchases, shareholder agreements and articles of association, reorganisations, preparation for sale, and employee incentives.

  • Partner
  • T: +44 (0)20 7778 7243
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Elena Perri

Elena is an Associate based in the firm’s City office, specialising in corporate and commercial law, advising both businesses and individuals.

  • Associate
  • T: +44 (0)20 7778 7248
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The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.

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