Buy & Build: What We Actually Look For

Most of the content out there on M&A for founders focuses on the “why” – why acquisitions make strategic sense, why now might be the right moment, why the multiples work in your favour. That’s all fine, but it’s not where founders tend to get stuck.

Where they get stuck is the “how.” And that’s what I want to talk about here – from the investor’s side of the table, because that perspective is rarely written down.

When a management team comes to us with a buy & build thesis, the first thing I want to understand isn’t the target. It’s the platform. Does the acquiring business have the management bandwidth, the financial controls, and the cultural self-awareness to absorb another company without losing what made it good in the first place?

I’ve seen acquisitions destroy value at the platform level before the target has even been integrated because the CEO was spending 80% of their time on the deal and the core business drifted. The best buy & build founders I’ve backed are almost boring about the base: they protect it fiercely and treat the acquisition as additive, not transformational.

The second thing I look for is a repeatable origination process. Not “we’ve identified a great target”  anyone can do that once. I want to see a pipeline, a methodology, an understanding of where targets come from and why the platform is the natural home for them. At GHG we have been on the journey, learned and developed. Three bolt-ons completed and each has been better than the last whilst the platform has maintained position and integrated more smoothly.

The single most underestimated skill in lower mid-market M&A is the initial approach to a target. At this end of the market, you’re typically dealing with owner-managed businesses, people who’ve spent 20 years building something and have never sold before. A cold email from a lawyer or broker doesn’t cut it.

The best approaches I’ve seen are founder to founder. The acquirer CEO picking up the phone and having a genuinely curious conversation, not a pitch, not a heads of terms discussion, just asking good questions and listening. The trust has to come before the transaction.

What kills deals at this stage, in my experience, is impatience. A founder gets excited about a target, moves too fast, and the seller feels like they’re being processed. Slow down the front end and the back end takes care of itself.

I would urge the conversation to stay away from the obvious, don’t talk financials, don’t talk deal terms. Talk about commercial and private aspirations; what really matters. Your ability to shape a deal will come from listening to what it is that the vendor really wants. They all want a cheque but is that the biggest driver or is there something else… legacy, ongoing role, support, looking after his family… often these are the things that really drive a deal.

At the lower mid-market, financial due diligence matters, but it’s often not where the real risks sit. The numbers are usually straightforward. The complexity is in the people.

Key questions I always want answered before a deal closes:

• What happens if the founder of the target walks out on day 31? Is there a management layer underneath them, or is the business a one-person show?
• What’s the customer concentration? Revenue is worth a lot less if 40% of it sits with one customer who has no contractual obligation to stay. Who owns the customers?
• Is there cultural alignment between the two businesses or are we creating a situation where the acquired team spends three years feeling like they lost?

One thing I’ve noticed is that acquirers often underweight the last point. Culture clashes don’t show up in a data room. They show up six months post-close when your retention starts moving in the wrong direction.

In a prior role, where I had experience of buying schools, we had to stand up in front of staff, parents and trustees who were not interested in the commercial terms. They wanted to understand the ethos, what was going to change, what does this mean for me and my family, how can you make things better?

The preparation (and always dry run) for these first meetings is critical. Think of everything down to the clothes you wear and the car you turn up in… nothing says “I don’t get the culture” by looking like someone “from head office”.

Earn-outs get a bad reputation, and sometimes they deserve it. But done well, they’re one of the most useful tools in lower mid-market M&A, they bridge valuation gaps, align incentives, and keep the seller engaged through the transition.

The problems start when earn-out metrics are too complex, too easily manipulated, or set over too short a timeframe. If a seller can hit an earn-out target by deferring capex or cutting heads, you’ve written a bad earn-out. If the target is 36 months out, you may have written a good one.

Deferred consideration is simpler but often underused: staging payments over time protects you against early surprises and gives the seller a reason to stay focused on the handover.

Integration planning should start before the deal closes. I know that sounds obvious…it isn’t.

The first 100 days determine whether the acquisition creates value or just creates noise. The practical priorities: get the financial reporting consolidated early (you can’t manage what you can’t see), communicate clearly and honestly with the acquired team, and identify the two or three things that absolutely must go well, then protect them from everything else.

We spend a lot of time on this and get buy in from the vendor and broader management. We all need to own this, and it works if some of the financial incentives are tied into it.

The thesis that makes me most nervous is the founder who wants to do acquisitions as a substitute for organic growth. Buy & build works when the platform is already performing. Using it to paper over cracks in the core business is expensive, distracting, and rarely ends well.

The thesis that excites me most? A platform with a clear value proposition, a fragmented market, and a management team that has done it before or has the humility to know what they don’t know and the instinct to ask.

That combination doesn’t come up often. When it does, we move quickly.

M&A is rarely a straightforward process, but learning from those who’ve been through it can make all the difference.

We’ll continue to share practical guides, founder stories and investor perspectives to help business leaders navigate acquisitions, growth and exit planning with confidence.

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