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Niklas Sävås

lines on the record: 55
first: 2025-04-11
most recent: 2025-04-11
sittings or episodes: 1
sources: podcast

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“Been great, and I mean, it's always a pleasure to speak about something that lies close to my heart. And I mean, we have the yearly event in Stockholm. This year we had, I think, 150 investors flying in from all over the world. So it was just great to meet so many friends and new friends and so on. And then we have at Red Eye, we have a quarterly report that we present on the sector. And we, of course, have a few companies under research coverage. And otherwise, I mean, you can maybe some of you recognize my voice from investing by the books, a podcast we have where we interview investors and mostly authors about books. So books is a passion for me. If you want to talk, you can find me on LinkedIn or Twitter or yeah, you can probably search for my email as well.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Of the reinvestment rate for the longer term. It's more how you think about these parameters that is the key. I think there is a risk with this model that it's quite easy to model it. So it really fits the mathematical side of many investors, I think, similar to software in one instance, I think. I don't need to add too much to the factors you mentioned. I think those are the key factors to think about.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Think you mentioned the most important ones, to be honest. I think that's sort of the key. And it's mostly sort of the thinking around reinvestment rates. For example, in Sweden, quite a few of the acquirers have a dividend. So that, of course, decreases the reinvestment rates. And I think that's partly because many of these companies are family-owned and wants to have the cash flow to invest in other business opportunities that they have. But I think those metrics are the most important to look at. Even though, I mean, we talk multiples. I think multiples are just sort of the easy path and you should definitely convert it into the factors that you mentioned. And then I would just focus on sort of all these potential risks that we have talked about. So what is the run rate? I mean, do we see a trend that is in the wrong direction in terms of maybe the company paying up a bit? Or it seems like they are not able to deploy all the capital that they need. So just how should you think about”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“It's definitely one factor. I mean, many of these serial choirs that are started from a goal of capital, I think the risk is higher. We talked about before that sort of many of these older ones have been started from one operating business and then buying the next and the next. So I think normally that's maybe higher risk because you don't maybe have that operational background that you want to see. But in terms of Frederick Carlson, of course, he has that. You know that he's run Liftco for a long time. He knows sort of the ins and outs, of course. I wouldn't say it's a one-man show. It's a great team they have, even though it's small. I think they are not so dependent on Frederick that maybe some investors think. And that's often the case with these, that it's normally a team, even though it's small, a few persons have this necessary skills. It's a bet on Frederick in a way. I think he will probably continue for quite a few more years. But I think I don't see the succession as a huge risk. So I think they have a good team.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I think that's sort of the reason why you typically use that. And then I think the good ones actually, they really focus on that the business should realize the earn out, because that means that you have actually performed according to plan. So it's not like you try to sort of make it harder for the entrepreneur to reach the earnout. I think it's the opposite that you really push that because otherwise you get this misalignment that you don't do things that you should. That's, of course, the risk that you sort of optimize for the short term and you destroy the business for the long term. So I think it's a risk, but I think it's a risk mitigation strategy that's probably important in some aspects, in some transactions.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I think it's often you pay a large part of the purchase price from the start, but often you have sort of an earnout if they deliver this growth over two years, then they pay that. So it's typically not just a payment, it's actually tied to that they will grow the business. And for the buyer then, the seller is definitely more optimistic about the prospects than a buyer. Normally, I would say. And sometimes for the buyer, it's like, okay, I don't really maybe believe in those numbers, but if we have an earnout, then we share the risk in terms of what”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Stake so I mean of course even though they don't set the agenda you need to agree on certain things and keep them up to date and so on so I'm not sure what's the optimal level I think it's good probably to be flexible that sometimes you would use that if you have maybe a younger entrepreneur that wants to stay on Sometimes it doesn't make sense if it's a succession and that person will move on anyway so it's a bit from situation to situation I think”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“She can continue for a few years, and I think that's definitely a risk mitigator. Otherwise, I mean, Earnout is also prevalent. Some companies have quite long earnouts, so they use that instead. I think that could work as well. But I think it's just aligning the entrepreneur with the Sherile Acquirer in terms of that. And I think it also ties down to sort of the overall incentives, what you give, because even though if you buy 80%, you will own 100% in the future. So there will still be a point where you do that. And then you need to incentivize, of course, the entrepreneur in other ways, maybe profit sharing. And I think many of the established ones, they have sort of the same metrics as they show publicly. I mean, focus on working capital, focus on organic growth. Those kind of things are what they are incentivized to drive. So if they're able to grow that pie, they get a share of that. Another point is that a risk with having a minority is the minorities, I think, will often care about their”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Think if you look back quite a long time back, I think it was more common to buy 100%, at least in Sweden you have this, if you buy less than 90%, you can't control the cash flows. I don't know if that's the case in other countries actually to what degree and so on, but I think that was a reason for you need to control the cash flows, and sometimes you can do that by you need to buy more than 90, but I think there are other ways you can do that because, for example, Roco is often not buying 100% and they are able to control the cash flow. So I think they're often below 90. I think they are at around 75 to 80, actually, if I'm not incorrect. And they are still able to control cash flows. I think that's the reason. I think it's a risk mitigator. You will get sort of the former entrepreneurs to have skin in the game. And they will also be incentivized then to drive the business forward. And I think it can be good that you don't have a fixed end date on her term, that he can continue or...”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Then you buy another one in another country because it's typically sort of this geographical barriers. And then you can sort of buy this type of cluster of companies where you can share expertise and maybe sometimes sort of in terms of procurement and so on. But I think it's not pushed by the companies. What many of these Serial choirs do is that they encourage the entrepreneurs within the businesses to speak to each other and they have sort of this management meetings and so on a few times a year where they have all the business unit managers that can meet at the same place. And of course, they are businessmen, so they would discuss these things and talk about how they can improve together. So I think there isn't that happens and it will likely happen with Raqqa over time as well. I think they have done a few Bolton acquisitions as well for the subsidiaries. So I would think that that could happen definitely for Roko as well. I mean, you want to buy similar businesses to what you have found because they are good for a reason.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I don't think it's a big problem. Of course, I think what comes down to is that it's harder maybe to convince investors that your business actually makes sense. You do something, you build something that will, if you add one plus one, you will get more than two, you will get three. But in this instance, I don't think that's the secret sauce. I think it's actually this rigidity in terms of what you buy and this execution in terms of sort of being able to push raising prices, improve working capital, and you create value from that. But it's, of course, especially that you're able to reinvest that into other good businesses. So I don't think it's a big problem. I think it's actually just part of this model that you need to do that because otherwise sometimes you would need to tilt. If you are focused on one specific vertical, for example, you need to tilt at some point in the future. What I would say is that it's quite common that you buy the category leader in one country and sort of you have that characteristics.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Because you won't be able to deploy all the capital you need to deploy. So instead just buying the best business, you start to pay up and you may buy businesses of lower quality and so on. So I think that's what they realized. And so a large part of the growth in recent years has come from system solutions within LyftCo. And Soroko just continued with that. So Roko is more or less system solutions only. They buy great businesses in various niches.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Would focus on that, the growth would be really low because there aren't too many acquisitions to make every year. And it's a bit similar in terms of demolition and tools that won't either be enough if they would only buy companies in those areas. And Frederick has said that when they started to buy companies in the other, I mean, system solution, it was a bit scary because it was quite easy to have sort of the track record that you had within Dental. You knew what the companies looked like. You knew what you would get. But when you try to buy other types of businesses, of course, you can get into other types of issues. But I think what they realized was that those businesses face sort of the same type of challenges as the others. And it's mostly just about buying high quality businesses with good track records. That's important because I think otherwise if you need to buy a business within other business areas, if you are really strict in terms of which vertical you want to focus on, the risk is that you do this large acquisition.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“In terms of difference, I don't think it is that different. So to begin with, I think Frederick Carlson has just continued to do what you did before. He raised capital and then started Roco and in Lifko they have three official business areas, of which one is system solutions. And in that business area, they could buy more or less any type of business-to-business business. But of course, to have sort of, you need to have a really strong track record of great financials and high return on capital and high margins and so on. And I think what Frederick realized was that back in the day with LyftCo, they have this other two business areas. One is dental and the other is demolition and tools. And in dental, they have this great stability. So they buy typically a bit smaller businesses, distributing sort of dental equipment. They can of course acquire those type of companies every year and so on. And it's also products businesses, of course. They could buy those businesses, but if they own”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“That the market grows fast, which means that more competitors will go into that market. And what this share requires by is that sort of if you have a stable market, which is small and not growing a lot, meaning that you won't get more competition. So I think it's hard to get both high organic growth and this stability that you search for.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely, I think this has been one piece that we have searched a lot for and really asked the CEOs about sort of what's the hurdle rate for organic investments. And I think what they will tell you is sometimes you don't get a clear answer, but what I can tell you is that they definitely demand a higher return than if they would do an acquisition. And I think that's the reason why investments in organic growth is quite low, because typically they don't have so many options. But it's, of course, trying to sell products in other countries and so on and they support that, but those type of investments aren't that costly. So I think it's a really low share of the total. So they don't do these big pushes that are costly. They keep that down and they don't try to buy businesses that have those characteristics. Because otherwise, I think that could be sort of a bit problematic. If they have sort of these businesses that could be a bit maybe gross too fast, because if you have a business that grows fast, it means typically.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“That competition will be lower and prices will be lower. The problem is that the entrepreneurs who runs these businesses which are, I mean, run at good cash flows, they don't need to sell. So typically the business who needs to sell at that time are money losing businesses. But Serloquires aren't really looking at those. So I think then it's just a matter of that these entrepreneurs will wait until sort of the cycle turns. So usually actually when the cycle is at the top interest rates are low, much more businesses are sold. So it's really hard to be counter cyclical. I mean, in this model for the industrials. So I think that's sort of maybe one thing that constellation has an edge in because they can also buy sort of underperforming businesses and turn them around. And in that case, I guess you can have a bigger inflow when it's tough times.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Think the normal level is for the other quality acquires, it's maybe around 5%, which is still good, I think. But it's somewhere there that you should sort of hope for. I think it's important, definitely. You need sort of to have the twin engine between organic growth and acquisition-led growth. And some years you have higher organic growth, and maybe the other side won't perform as well. The last couple of years, for example, we had this sort of inflation boom. And what I think that showed was that the best serial acquires in the Nordics, they were really early in pushing for raised prices. They've had probably inflation adjustments in many of the companies implemented. But some of the sort of the newer requirers, they hadn't. So it took them a year or so before prices. I mean, they could increase prices. And also over those times when organic growth lags and the business cycle is at a low, you of course hope these acquires to make a lot of acquisitions because you think then”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I think organic growth over time is like a hygiene factor that they actually buy the right businesses because otherwise they wouldn't be able to show that I think. And the lumpiness is that you don't have the same characteristics as software. So, I mean, even though you buy these niche businesses, you're still, the business cycle will impact you. taking LyftCo for example they have some businesses which is related to construction activity for example so even though you are sort of the best business you're selling to a market that is have that inherent lumpiness in sales, I think so that's definitely one thing so it's you definitely need to think sort of over the cycle with many of these industrials that they are able to show that over time and then the most important factor is of course that they show organic profit growth and sometimes they disclose it sometimes not I think Lyfko disclose it over time and they have 8% average over time which is really impressive I think”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Think one piece of it is the businesses they buy, and of course that's the case for constellation as well that you have sort of you buy businesses with high switching costs, repeatable business. And it's sort of, what's similar to the industrials is that you are typically in a small niche. In software, sort of the big software names. I mean, for them, it doesn't make sense to compete in such a small market. And I think that's the same for the industrial in terms of that. So that's one piece that If you do sort of the niche acquire model that you buy the right companies. So that's one part of the moat, I think. The other part is more fuzzy, I would say, that you have sort of a strong culture and a great capital allocator at the top. That's really important. But I think it's maybe a bit too fussy for many investors who want to have this clear mold. I think maybe on the business unit level, it's really important that they buy the right type of businesses with moats. And then the other side is just”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“For decades ahead. And if you haven't grown in a sustainable way for the last years, then I think, yeah, the market will distrust you and the multiple will, you will definitely get a big hit on the multiple, I would say.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Peak of a cycle and not in the trough. So that's one piece, I think. I think another pitfall, and maybe this is for if you are already public and you have executed this model and you have a good track record, still it's this if you go to aggressively on growth, you can sometimes sort of end up buying a large business. And if you buy a large business, if that fails, it can set you back for years, I think. So that's definitely one thing. Another thing is just buy maybe too much at a short time frame and the leverage level goes up. And you need to spend a few years just sort of paying back debt, then I think the market looks far ahead if you execute. But if you haven't executed for two years, then people will start to question sort of how good you are as a capital allocator. And that's everything in this model. I mean, if you're going to get a high multiple, you need to, I mean, market needs to think that you should be able to compound.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I must say, I mean, there is sort of if you look at the private market in Sweden, there are a lot of private sell acquires. And I think, in my view, there is sort of a valley of death, that if you have done, maybe you got funding for the first 10 acquisitions, but if three of them are not performing, say that even if you are loss making, and you don't produce the necessary cash flows by then in order to continue to acquire companies, then I think the one financing this platform won't be happy to put in more money. So I don't think you get many chances. And I think there is this bit of a survivalship bias that we see all these successful ones. And we don't see the ones that have not succeeded. But I think there is quite a few that aren't. And I think one part of the pitfall is what I mentioned earlier about sort of buying the wrong type of companies to cyclical companies. And if you're going to buy a cyclical company, I think the seller knows in which sort of part of the cycle they are. So they will likely sell their businesses.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I think if it's auction led process in the Nordics, I think there is often competition between them. If it's sort of from proprietary search, I think it's less often even though in proprietary search, there is often sort of a broker that is involved in one phase of the process just to make the transaction process a bit easier. And it's hard to tell. I think it's not uncommon that they compete, but it's definitely not always and definitely not that you see all of them. But maybe one or two in, especially the larger ones, definitely.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Phase. In Sweden, it's not as costly and it's a more simple process, definitely. But to add to that, for the larger ones in Sweden, I think Sweden as an acquisition market is just shrinking because the competition has become harder. And I would say that many of the best businesses have been acquired. So there are, of course, a large pool of potential acquisitions to do, but I think if you're going to buy 20 companies a year, I think if you can get two or three in Sweden, I think it should be quite happy. And the rest needs to come from the rest of Nordics and especially the rest of Europe.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Definitely be. I mean, I'm not sure, sort of, maybe you know about the multiples in the US markets for private businesses. Is it that sort of, because if the multiple is higher, then usually, I mean, it will be higher to get the same return. Because if you have the similar interest rate environment, probably a bit higher than us currently. So to finance those acquisitions will probably be a bit more expensive. And I don't know how, I mean, if sort of US banks are more reluctant or not in terms of financing, that could potentially be a difference. But in terms of regulations, I think you have a point that in Sweden it's quite easy to do business. It's sort of, I think in one way, quite similar to what Buffett has done all the time that you hopefully not too many sheets of paper. Just compare that to, for example, when the Swedish businesses entered the UK. I mean, the paperwork is much more burdensome and you have much more legal fees. And so there are more friction in terms of the transaction.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“You could call them copycats. I've seen the success of these serial choirs, and especially now the last years when the multiples have gone up on the public markets, then many wants to copy them and do the same thing. And I think what we will see in the end is that it's really hard to succeed. And even if you sort of have this, that, yeah, we can be value that sort of the multiples that the best ones have, it takes decades, I think, of execution to get there. Well, that's one piece that you have managers who sometimes leaves the larger serial choirs to start their own. I think that has been a case for constellation software as well that some managers have left to start their own. Of course, if you do this successfully starting up, of course the financial returns could be really, I mean, much higher than if you stay on as an employee. So I think that has probably attracted many. But I just think it's much harder than you think. It's a lot of hard work. And also, I think you need some labor.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“It's a bit hard. I mean, if I answer the question from the angle why is there so many Swedish serquiries, I think in one way it's success sort of breeds success. But I also want to add that many of these older acquirers, they sort of started independently. But you can see some threads in terms of mentors and so on. And I think, so for example, in Sweden, we have Electrolux. And they were also sort of a serial acquirer in their time, a bit different from these that we talk about. They could buy quite large businesses and it was more of a roll-up model where they bought similar businesses and just grew in different geographies from that. But I think the managers from Electrolux, I think that management sort of knowledge has been used for others. I think some people there, as for example, Carl Bennett, who is the main owner of LyftCo, he comes from that school. And I think for others, they have been an inspiration for how they have created their businesses. But then, of course, we have a long list.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Then typically listed on the exchange when they are not done but close to done. So the opportunity for public market of investors in those kind of situations aren't great all the time, I think, because otherwise often I think private equity would have continued a few more years and just bought these companies at low multiples. So this will be really interesting to track, I think, for the next years, how much sort of that impact will be on the zero acquirers.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think that's definitely one thing. I mean, if the multiples sort of go up, they won't go up a lot one year, I mean, to the next. But if you see that trend sort of increasing, increasing, increasing, that's definitely a sign that's sort of the foolish shrinking. So that's definitely one thing that you could keep track on. It's really important. I think one thing I've been thinking quite a lot about recently is that with the sort of higher interest rate environment that we have had in recent years and less activity from private equity, I think that's opened up a few opportunities for many of these shareholder acquirers. And that's something that if sort of private equity comes back, it will be interesting to see how much that impact sort of the opportunity. I've heard others also say that private equity is making larger entry into this space. So typically, I think private equity has mostly focused on this roll-up models to buy up companies in a fragmented market and sort of establish the market leader. And that's...”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“This is one of the hardest things, I think, because what we can rely on is sort of what the companies actually do in terms of are they able to scale, have they been able to do that for a long time? And the other piece is how many companies out there. And I mean, you mentioned a few stats on sort of how many private companies there is in Europe and so on. And of course, we can rely on that. But I think even more, it's just working as an analyst. You just continuously try to check sort of that, okay, how many businesses are sold every year to these acquirers? Do we see any commentary or any signs of this diminishing? Because I think this is really key to keep the high multiples that these companies have. I mean, they should be able to compound for a long time to come in order to get that sort of multiple that they have. So this is probably one of the key things I try to look at, but it's also one of the things that's hardest to get the information on.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“No, I agree, and that's the same what I've heard. I think that's often the case that these businesses are not in the city center of a large city. They are out in the rural area. And I think this is actually quite important because if you're also a small business, so say that you only have maybe 5 million in sales, it's even harder to recruit sort of a great manager. I've tilted toward thinking that maybe you should buy a bit larger businesses. If you buy sort of 100 or 10 million US or 20 million US, it's easier to attract a better manager. You can pay up a bit more and it's more prestigious and status, of course. So I think that's probably quite difficult if you buy really small businesses. That's even more difficult because the successions will be as many as for the larger business. And every time it will be really hard to sort of get that right.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“It could also be a younger entrepreneur. I mean, it's quite a lonely work to be a CEO, I think, even in a smaller company. Yeah, of course in larger companies as well. I think it's lonely and they want to have support to drive their business forward. And I think also to have sort of the financial muscles of a series that's backing you is important in terms of that you could have relatively high customer concentration risk that probably keeps you as an entrepreneur awake for large part of your time. And I think to be a bit more offensive, I mean aggressive in terms of the strategy you employ. It could also help should I start to export to another country? Should I sort of build up that resource? I think those decisions are probably easier if you are part of a larger group.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I would say it's two cases. I mean, often it's succession driven, I would say. And then you have sort of maybe at least a two-year plan. You tie an urn out to when the former owner leaves. And during that time, you try to find a success or probably, I mean, hopefully in the beginning, you already know that, okay, the number two or someone running sales or someone else in the company will be the successor. Because I think these companies want to avoid having to recruit externally because this is a factor that I think it's really hard to be really good at. So what I hear is that maybe 50% of the time you succeed with an external CEO recruitment and sometimes it can take a few CEOs before you land right. So I think this is something that these companies want to avoid because of course it's quite costly in terms of both actually doing the recruitment but especially that the business could lag during that time. So I think that's really important. I think if it's not succession driven”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Company that we have built over generations, it takes some convincing, I think, but if you have sort of the track records of these big ones, of course it's a much easier sell, I think.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Strategic buyers. So I think in those discussions, actually the Swedes, they don't really compete against each other. They compete more against others. And then sort of their case becomes much more clear. And of course, they can call all the former sellers. I mean, there's such a large list of sellers who have sold to these companies and have a story to tell. So I think that's definitely important. And I think this buyer of choice is actually even more maybe important if you're going to start up a serial acquirer because we see from time to time many new serial choirs popping up. And of course, they look at the opportunity, as you mentioned before, so many private companies out there to buy. And also you could see sort of the difference in multiple what you buy compared to what you can sort of have on the public market. And we can go in a bit more to that. But I think it's hard if you come out there and you haven't bought a company before, it's hard to get an entrepreneur. Is this a safe haven for my?”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Touched on many interesting parts there, and I think one thing that I want to begin with is you have a few sort of high quality serial choirs in Sweden focusing on industrial companies, and their stories are very similar. So if you're going to choose as an entrepreneur between selling to IndoTrade or LyftCo or Logicrants or AdTech, I think it's often down to sort of the relationship that you get a sort of a really strong relationship with the potential buyer with the people actually who you talk to. I think that's a key differentiator. And then, of course, price becomes one piece, but they will, I would guess, be quite similar in terms of price. But if you just look at this a bit broader, as you mentioned, I mean, many of the Swedish companies now buy companies abroad. And there you definitely have other types of buyers, maybe in a, I mean, more often, especially if you go up a bit in size. I mean, you would have likely have private equity, for example, lurking, and you have others.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“So they keep it really lean, as lean as they can, I would say, so they don't have the capacity, they don't have the, they can't go in and sort of work actively with the companies. They need to have great managers who run things at the business unit level. And if not, I think sort of you destroy the whole model, I think. Of course, it's an active choice from these companies that they started as this. And I think many of them realized that if sort of entrepreneurs get the freedom, of course under accountability, then they perform better. So I think it's this thinking that actually leaving the companies with more freedom actually will help your business thrive.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's a good question. I think I want to bring some history to the discussion, and I think Sweden, in my view, has been sort of quite early on decentralization. And one of the sort of the Who was the CEO of one of the largest Swedish banks, Svenska Handelsbanken? When he joined, he just sort of revamped the company. I mean, it was sort of really centralized, a lot of committees at the headquarters, marketing department to help all sort of the bank branches with marketing. And when he came in, he cut sort of the marketing, the central marketing department from 40 people to one. All the committees had to motivate why they were needed. And the headquarters became sort of a support function. and was not the driver of business. And I think that's a similar thing with these businesses where sort of it's all the business units who runs the whole business. The headquarters is only strategy and sort of guiding the setting the direction for the company. So I think that's a really similar thing with how these are run. And just looking at the numbers at headquarters, some of these companies have 2 billion US in sales and they have maybe 30, 40 people at headquarters.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Acquisitions. I think you need to grow your team a bit. But otherwise, I just this is a really interesting thing, actually, in Sweden, that some of the larger ones, they have reached a size now that I think they need to think about this more and more. And it will be really interesting to see how they scale the model. If they buy one-off larger companies or if they're just able to buy more and more. So I think in the next decade or so, we will see how good they are at this.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think many of them haven't reached the roof. But what I mean by that is that the most acquisitive serial queries in Sweden may be buy around 20 companies, maximum 25. Of course, you don't have sort of a CEO that runs everything himself or so on. But I think it's not too many for sort of the CEO to have his say, a last saying on that. But otherwise, I mean, to run all the processes, that's, of course, delegated to either sort of a head of M&A is sometimes some of these companies don't even have a head of M&A. So instead, they have the business area managers who take care of that. But what I've seen is that normally one business area manager could have maybe 10 or 12 business units under him or her when they have that role, they typically manage these companies and also are responsible for acquisitions. So I think you need to decentralize it when you reach maybe, I think more than five or ten.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“But then on the execution and actually doing it, I mean, that's really decentralized. And often the case, I think it is sort of when they come into problems, then you can see that headquarters are more involved, but they don't have a big team. They don't have a private equity team who can just go in and fix things. So how they normally do it is that they replace the CEO.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Definitely. I mean, it's sort of this looking at sort of and studying Warren Buffett and what he has done at Berkshire. It's sort of really centralized at the top. So, I mean, the capital allocation decision comes from the top. And I don't think this is so similar with the Serloqui choirs. I think the ones that have been able to scale the business model sort of has decentralized acquisition down to sort of business area managers or so. I mean, that's something consolation has been successful at. That's also the case for some, I think, Swedish serial queries, but I think most of them are centralized in that decision. But otherwise, how they run these businesses is that the headquarters, they have staff on the board of the subsidiary. So they keep it at that level. So they sort of have a few board meetings every year. And then, of course, the entrepreneur can call their representative from the headquarters when they need to. But otherwise, I think it's run sort of that headquarters help them with setting the strategy and so on.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Many of the companies that they look at hasn't raised prices for a long time, and they're happy with what they have, and they don't need that in order to keep having a good life. So I think they professionalize the companies quite a bit.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Big focus is on cash flows. And that's, of course, something that, I mean, we as investors really like as well. And I mean, it makes sense because if you're not good at generating cash flows, you won't be able to reinvest money into the next acquisition. So big cash flow focus, and that means that you focus a lot on the working capital and so on and keeping capital expenditures low. That's definitely one key. And then it's sort of this business acumen that you bring many of the companies that these buyers buy is sort of they are good for a reason. I mean, otherwise they wouldn't be looked at from these companies, but they could improve the, I mean, both I'm working capital, but I think also in terms of pricing. So pricing is a component that I think many of these companies add just to sort of not push prices too hard, but just make sort of the entrepreneurs aware that pricing impact can be really important for the long term.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“Trading companies. So in the beginning, you had a trading company that was able to generate a lot of cash flows. The managers at the time realized that, okay, what should we do with this cash? Oh, we have some similar companies here we could buy. That's at least the story I hear. And it sounds really good. So I want to take that perspective. And then they just continue. I mean, they found other businesses with the same characteristics and they continued on and on. I mean, as many of you know, Sweden is not the largest country and we are dependent on exports. Many of the sort of trading businesses that these companies bought were able to supply the Swedish industry with sort of machines and tools and so on. So that was sort of the background. And I think many of these companies since, and this is maybe the last decade or two, has tilted towards buying a bit more proprietary product companies, but it's the base is sort of in the trading, or you can call it distribution businesses.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I mean, there is sort of a big four, and those are the ones that have been there for a very long time. And, I mean, IndoTrade is one that started back in, I think, in the 80s. Lyftco is another one. And then you have the Berman and Beving family of companies where Berman and Beving is very, I mean, sort of a very famous company that started back in, I think it was 76, 1976. And in 2001, they spun off Lager Kranz and AdTech. And those have outgrown the mothership quite a lot. So I think those companies are a bit more, I mean, they're much larger and more famous now. So I think Logic Krant's ad tech into trade and LyftCo is sort of the big four. And I think definitely you should study the history of Berman and Beving, but you should also study Lifco and in the trade, I think. If you do that, I think you get a good grasp on the model. And I think what's sort of, if you, just to give some background on that, I think many of these companies started as”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“I think that is important in order to sort of elevate the returns. So if you're going to get a return on equity above 20%, you won't get that just from buying cheap businesses. If you don't have sort of a magic formula, I mean, we can go into specific businesses later on. But I mean, sort of constellation software, I think they have a magic formula. They don't need that to get those returns. But most others, I mean, if you look at the Nordic companies, they don't buy turnarounds. They buy quality companies and they strive to improve them, of course, but it's a small improvement over time. It's not sort of a big improvement the first year. So I think if you're going to go for a return above 20%, buying quality businesses, you need to elevate the returns by using that as well.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“The sort of established ones probably learned this a long time ago, those type of businesses are more or less gone in those portfolios, but I think that's sort of a big differentiator. I can say also that what I talk about now is something we call niche acquirers. There is also this, of course, the roll-up strategy where you sort of acquire companies in a really fragmented market and strive to become a market leader in that by that strategy. I mean, normally practiced by private equity, for example. But I think those strategies are a bit different. We can go in deeper to that if you want.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT
“This is sort of a key thing, and a key thing for me is sort of differentiate between quality and not so high quality. So I think the best companies, they buy companies with a moat. I mean, you need to have a moat. And often that's sort of what I mentioned before, that you are in a small geographical market and you have sort of maybe regulatory barriers or just long-term customer relationships that it's really hard to get in such a market. And as they are very small often, say, if you have a market that is maybe 50 million US in total and one player has half of that, it's hard to see that someone invests to get a piece of that. So I think that's key here, that the best businesses understand that you should focus on those type of niche businesses. Others that maybe hasn't learned the hard lessons or how it is to buy companies without a moat, they realize that when the cycle turns. And I think that's been a hard lesson for many of these newer acquirers.”
2025-04-11 · We Study Billionaires · TIP713: Why Serial Acquirers Outperform w/ Niklas Sävås · IDENTIFIED FROM THE TRANSCRIPT