Lifco: Dentistry, Demolition, and Decentralization - [Business Breakdowns, EP.168]

50 snips

Jun 5, 2024

Adnan Hadziefendic, a portfolio manager at REQ Capital, shares insights on Lifco, a Swedish conglomerate known for its decentralized approach to acquisitions. They dive into Lifco's impressive growth since relisting in 2014 and its unique strategy to acquire niche market leaders in both dentistry and demolition. The discussion highlights the company's agile management style, especially during crises like COVID, and its effective capital allocation helping maintain profitability. Key lessons emphasize the importance of long-term thinking and maintaining independence among acquired businesses.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

ANECDOTE

Lifco's Early History

Lifco's history traces back to LIC, a Swedish medical equipment and services provider founded in 1946.
Through mergers and acquisitions, including Axel Lundson Instrument and STI Group (with Dab Dental, founded in 1903), Lifco evolved.

ANECDOTE

Lifco's Restructuring and Re-IPO

Lifco, initially public, went private in 2000 due to poor performance after its IPO.
It restructured, improving margins organically, and then re-IPO'd in 2014.

INSIGHT

Lifco's Acquisition Philosophy

Lifco's acquisition strategy targets high-margin, niche businesses, prioritizing profit growth over sales growth.
Their focus is on specialization and pricing power, even if it means sacrificing revenue.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

This is Zack Fuss. Today we are breaking down Lifco, a Swedish conglomerate recognized amongst a group of notable Scandinavian serial acquirers. Lifco’s business focus is to acquire and develop market-leading niche companies that run independently and are largely self-funded business units. Carl Bennet, the current chairman, is the architect behind Lifco and was the former CEO of the famed Electrolux in the 1980s.

After acquiring a business out of Electrolux with a friend, Carl formed the group that is now today's Lifco. The roots of the business are in the medical sector, specifically dental, but have since grown into a diversified conglomerate as an acquirer of dental instruments, demolition equipment, and a wide array of specialized industrial businesses.

I'm joined by Adnan Hadziefendic, a portfolio manager at REQ Capital. We discuss the company’s clear philosophy centered on constant long-term growth, a focus on profitability, and an intentionally decentralized organization. Please enjoy this breakdown of Lifco.

Register for the Business Breakdowns x Founders Conference.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:27) Lifco's Business Model and History

(00:06:29) Core Segments of Lifco’s Business and Acquisition Strategy

(00:07:14) Carl Bennett's Role and Lifco's Evolution

(00:09:53) Lifco's Turnaround and Expanding Outside of Dental

(00:13:47) M&A Strategy and Integration

(00:16:53) Lifco Playbook for Post-Acquisition

(00:22:41) Decentralization as Paramount to the Lifco Culture

(00:28:02) Aligning Incentives Across Acquisitions

(00:34:31) The Recent Leadership Transition

(00:38:56) Lifco’s Capital Allocation Strategy

(00:41:10) System Solutions and Future Growth

(00:47:37) Lessons from Breaking Down Lifco's