Swedish serial acquirers have cracked the code on how to compound their wealth (at a staggering rate!)
Their holding companies trade at 12-29 times EBITDA.
Here is the story from their founder and CEO Fredrik Karlsson who got so unhappy with his boss so he decided to leave…
Start the exact same business.
Following the exact same strategy.
Today, ONLY 6 years later, he and his team has done 26 acquisitions which does $600M in revenue and $100M+ in EBITA
Here's a 74-minute in-depth summary of two full interviews with Fredrik Karlsson, a true buy-and-build pioneer, and Johan Bladh, Röko's CFO.
(I often learn by reading and listening, so I decided to read these interviews out loud.)
Show notes:
00:00:00 - Intro
00:01:29 - 26 portfolio companies, all asset light businesses
00:10:14 - The benefits of being sector agnostic
00:20:20 - Offering a 10-year put call option to the founder
00:26:01 - The hurdle of 15% operating profit
00:30:03 - With 8 people in the HQ, we can grow our profit even to $400M EBITA
00:35:15 - Looking at 300-400 deals per year (which leads to 6-12 acquisitions per year)
00:37:42 - HoldCo model vs Private equity: Decentralization and reporting of portfolio companies
00:44:03 - Understanding the markets, knowing what to acquire
00:56:07 - Competition in transactions
01:00:03 - What type of companies are they acquiring
01:11:12 - Maximum number of deals per year: 7 platforms; 2 add-ons
Follow Mikk/PrivatEquityGuy on Twitter: https://x.com/PrivatEquityGuy
Full interviews are free to read on In Practise website (huge thanks to their team for doing this):
Fredrik Karlsson, the CEO of Röko: https://inpractise.com/articles/roko-building-a-leading-serial-acquirer
Johan Bladh, the CFO and deputy CEO of Röko: https://inpractise.com/articles/roko-manda-strategy-transaction-structure-and-returns
This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
