Disclaimer: Unless noted otherwise, views and analysis expressed here are the author's own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.
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What’s inside:
Company | Country | Focus |
Röko | Sweden | Agnostic |
Kelly Partners Group | Australia | Accounting firms |
Relais Group | Finland | Commercial vehicle aftermarket |
Sdiptech | Sweden | Infrastructure services |
Diploma | UK | Value-add distribution |
Medcap | Sweden | Life sciences |
Volati | Sweden | Agnostic |
Addtech | Sweden | Agnostic |
Storskogen | Sweden | Agnostic |
Lagercrantz | Sweden | Agnostic |
Genda | Japan | Entertainment |
Novedo | Sweden | Industrial services |
What is it? An acquirer of niche infrastructure companies
31 companies operating under a decentralized model. SEK 4.5B revenue & SEK 1B EBIT (22% margin!)
Why does this make sense?
Euro infrastructure is aging and requires modernization/digital upgrades
Growing urban population driving expansion of water, energy, transportation systems
Finally, increasing sustainability and safety regulations are driving investment
Geographic split: ~50% UK, remaining 50% spread across other European countries
Portfolio examples:
GAH - the UK’s leading transport refrigeration solutions provider. Equipment for delivery vans (pharmaceuticals, grocery). Fleet lifecycles: 6-7 years (up from 5-6 years previously). Service contracts attached to every unit. Future digitalization trends for tracking/monitoring deliveries
Cryptify - encrypted communication solutions. On-premises alternative to WhatsApp/Signal for government agencies. Customer base in Sweden and other markets
4 strategic pillars:
Portfolio management. Divesting 11 companies that do not meet investment criteria (10/11 completed). New capex framework: categorizing companies as growth, harvest, or strengthen
Proactive ownership. Short + long-term targets set for each company using the DuPont framework. Dual focus: EBIT growth and capital efficiency. Enhanced performance management approach
Disciplined M&A: 20% IRR target for each investment. Focus on cash flows rather than just EBIT multiples
Cluster development: Connected groups of companies with synergistic benefits e.g. Cold chain
Financial targets:
EBITA growth of 15% annually
ROCE of 15% (vs. 13% in 2025)
Net debt/EBITDA <3x
M&A criteria:
Infrastructure-focused product and service businesses with 15%+ EBIT margin & EUR 1-5M EBIT
“Alternative to traditional private equity/industrial buyers”
A listed British HoldCo with a portfolio consisting of critical services and products. Evolved from a small UK industrial distributor to an “international solutions provider”
£1.5B revenue across 3 divisions. 20%+ operating margins. 20% ROIC
Do not necessarily see themselves as a serial acquirer - organic growth is very important
Organic growth has averaged 5% over the last 30 years, accelerating to 10% in the last 1-2 years
Sounded annoyed about investors asking him about the “pipeline” to evaluate growth potential
Still, have closed 50+ acquisitions
How does Diploma allocate capital? “I don't have favourite children”. The biggest constraint is bandwidth not capital
The No.1 reason why acquisitions fail is due to misjudging people/culture - not for financial reasons. The buyer not understanding seller intentions, organizational culture, or transition management
Solution: long-term relationship building before acquisitions. Visit every business and meet every owner personally. Build relationships over years, not quarters
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