Top areas for buy & build consolidation in Europe revealed

Private equity buyers continue to undertake M&A activity more selectively, but a number of key segments are emerging as bright spots for buy & build dealmaking across Europe.

CIL Strategy Consultants analysed more than 2,500 buy & build segments across Europe to identify the areas where dealmakers are finding long-term value. The report found that integration and platform quality have emerged as the key measures of success, rather than the scale that can be achieved through M&A.

Alex Marshall, senior partner at CIL Strategy Consultants, commented: “Buy & build has always been a core private equity value creation strategy, but it’s getting harder. Great outcomes are now driven by more than scale alone – the quality of the platform is coming under ever greater scrutiny, and thus a critical determinant of exit value.”

In the UK and Ireland, investment is being driven by a transition towards technology-enabled platforms. Meanwhile, a shortfall of 580,000 beds in the student accommodation sector is generating considerable investment, despite the impact of recent policy changes.

According to ONS data, the number of 18-year-olds in the UK increased from 736,000 in 2020 to 807,000 by 2024. This figure is forecast to continue growing, albeit at a slower pace, reaching 878,000 by 2030, helping to drive ongoing demand for student accommodation.

Other UK segments attracting buy & build investment include market research and polling (in which specialised capabilities are increasingly being combined with AI and proprietary data) and technical building services, which is being supported by essential safety obligations, with effective recruitment and retention of certified engineers helping some companies to attract premium valuations.

In the Nordics region, professional services industries are described as still being highly fragmented, with chronic skills shortages meaning that recruitment agencies have emerged as a primary target.

The gym sector is attracting investment, with technology being used to manage yields in what is typically a low margin market. IT asset disposal is also seeing growth, with new EU regulations driving platforms to automate electronics refurbishment.

In the Benelux region, meanwhile, nurseries were identified as a high priority area, with a significant undersupply of sites driving investment, along with specialist cleaning services and the camping sector.

Succession challenges at German owner-managed businesses were described as driving unique opportunities, while specialist cleaning services, the technical ceramics industry and the camping market have also emerged as hot spots.

Industrial maintenance and technical testing were found to be key focus areas in France, with the average age of French machines (19 years old) meaning maintenance is necessary to support productivity. These markets are also being boosted by the rise of predictive maintenance, as well as tighter EU regulations governing product safety and environmental reporting.

Finally, the Iberian market is seeing strong momentum in both student accommodation and tourism, while the region’s camping sector is being boosted by rising hotel prices. The kitchen furniture manufacturing segment is described as being highly fragmented, with possibilities for automation and consolidation driving investment.

While some UK owners may be hesitant about targeting acquisitions overseas, the opportunities for growth offered by international M&A should not be ignored

Share this article

Latest Businesses for Sale

---

---

---

View more businesses for sale