Buying to Grow

Triple Point’s Head of SME Debt Finance, Dominic Reason, and YFM’s Managing Partner, Jamie Roberts, share their experience on what a playbook could look like for scaling through acquisition, what to decide, how to fund, and how to integrate.

Organic growth remains the foundation of most businesses, but there comes a point where scale, diversification, or capability-building could need something more deliberate. Acquiring other businesses by raising third party finance can be a powerful tool to accelerate growth, provided it is used with control, purpose, and discipline.

From different sides of the table – debt and equity – both Triple Point and YFM have seen Entrepreneurs taking acquisition-led strategies and transform ambitious SMEs into market leaders. Here, they share two complementary perspectives on how to make those strategies work: one focused on strategic alignment and long-term value creation, and the other on financial efficiency and discipline

We see acquisition-led strategies deliver exceptional outcomes when they are grounded in five core principles: strategic clarity, prudent leverage, vendor alignment, governance / experience, and transaction discipline. These principles turn opportunity into value creation, in a way that strengthens a business and leadership team rather than stretching it.

Write down a simple rationale: why acquire this business, why now, and how does it advance the existing strategic plan. Each potential acquisition should have a defined role in delivering the strategy a leadership team is following; either broadening your proposition, entering an adjacent market, or adding capability that you do not think you can build quickly. Clear intent keeps you from chasing distractions. Experience would suggest that fewer, better-aligned acquisitions compound value more reliably than opportunistic and high-volume deals.

Think about the whole capital stack. Senior debt, mezzanine, vendor loan notes, deferred consideration and earn-outs, not just the headline valuation. The goal should be a structure that balances flexibility, affordability and ambition. Used well, debt is a tool for capital efficiency: debt reduces the equity cheque and can lift the multiple on invested capital (MoIC) at exit.  As cash flow pays down debt, more enterprise value converts to equity; and because equity value crystallises at exit while interest is paid along the way, the internal rate of return (IRR) benefits from those back-ended gains.

We believe the best opportunities are partnerships long before they become transactions. Ideally if you can find a way to keep sellers invested and focused, through equity rollovers, earn-outs tied to real value drivers, and a managed cultural handover.  Founders can often value being part of a bigger platform without carrying the day-to-day load, but it is key to understand motivations around time scales and being clear on what role you want them to play.

Acquisitions on their own do not create value, integrating them really well do.  The integrations we see doing well have a right-sized governance rhythm agreed in advance to make sure the integration is happening to plan, monthly packs, clear key performance indicators, and escalation paths that create visibility without slowing teams down.  If you can get advice and guidance from people who have acquisition integration experience you will have a big head start; especially people with experience of merging systems, managing culture and priorities without losing the energy that made the potential acquisition attractive. If you are using external acquisition finance, operate confidently within facility requirements and communicate with lenders to preserve flexibility for future deals.

Start every process with a pre agreed statement of fit and objectives. Revisit it as diligence evolves through the acquisition process.  If the commercial reality, financial profile or culture diverge, walk away — even after time and cost – as the short-term pain is better than the long term challenge of pushing water up hill.

Acquisition finance, done with clarity and discipline, is one of the most powerful ways to build long-term value. It helps ambition move faster, without compromising stability.

While debt finance provides the super fuel for maximizing equity value from acquisitions, equity investment allows businesses to go faster than debt can allow, provides more resilience, flexibility, and scale.  At YFM, the most successful acquisition led growth stories emerge when equity is used not simply as capital, but as a partnership tool — aligning management, investors, and founders around a shared vision of sustainable value creation.

We approach acquisitions through five practical lenses: clarity of ambition, people and leadership, platform-building, alignment, and post-acquisition discipline to drive that strategic plan.

Every acquisition should strengthen the core business — expanding capability, entering new markets, or deepening the customer proposition. Equity investment provides the freedom to look further ahead, enabling management teams to prioritise strategic fit and long-term growth over short-term financial metrics. It underpins ambition and allows businesses to make decisions that deliver sustainable value over time.

The success of any buy-and-build strategy depends on leadership. Effective integration requires strong communication, cultural alignment, and clear accountability. Equity investors back the team as much as the transaction, supporting management to unite people, systems, and priorities across acquisitions.

Equity capital should create a scalable platform, not just fund transactions. Establishing the right structure — governance, reporting, and operational rhythm — enables growth without complexity. When built well, this foundation allows future acquisitions to be integrated faster, more efficiently, and with consistent value creation.

Equity naturally aligns all stakeholders around long-term outcomes. Management and investors share in success together, focusing on building enduring enterprise value. This shared alignment fosters collaboration through the integration process and sustains performance as the business scales.

The real value of an acquisition is realised after completion and integration into the wider group.  Equity partners remain actively engaged post-acquisition, helping to refine strategy, strengthen governance, and track performance. Maintaining focus and discipline through integration ensures that acquisitions compound value rather than dilute it.

Debt provides efficiency; equity provides endurance – the two combined are a powerful force.  When combined effectively, they give management teams the confidence and capability to pursue bold, well-structured growth. The partnership between debt and equity enables businesses to scale with purpose, control, and resilience.