In short
Add-on sourcing is the search for a platform you already own. The framing does not come from a thesis but from what the platform can do today and where its gaps are. I find the acquisitions that fit and approach the owners.
- The framing comes from the platform, not from a sector thesis.
- Region, capability and size band count as separate gaps.
- The platform management is involved, not only the fund.
- The owners are approached before a process starts.
When it fits
When add-on sourcing is due
01
Buy-and-build is in the plan
The platform is bought, the acquisitions are in the investment case, and now they have to come.
02
Management has no time
The managing directors should run the business, not look for acquisitions on the side.
03
A regional gap
The platform is strong in one region and not present in the neighbouring one at all.
04
A capability is missing
Customers ask for something the platform has to buy in today.
What you receive
Add-on sourcing in five parts
Before I search, I understand what the platform can do, where it is strong and where the gap actually sits.
You see not only which companies fit but which gap each of them closes.
The platform management sees the candidates and says what holds up technically.
I approach the owners while no adviser has been appointed yet.
Buy-and-build does not end after the first acquisition. The framing stays live.
Where the gap sits
Three gaps, not one.
Facility services, core in maintenance and repair, based in Baden-Württemberg
Example platform. We fill the axes together with your management, sites and revenue shares come from their figures.
A platform can be strong in a region and thin in a capability. That is why I look at the three axes separately before searching. Whatever is missing from a bar is the search brief.
How it runs
From platform to acquisition
- 01
Understand the platform
It is clear what the platform can do today and where the gap sits.
- 02
Framing
The search framing is set, separated by region, capability and size band.
- 03
Candidates
The fitting companies are on the table, sorted by the gap they close.
- 04
Alignment
Management has said what holds up technically and what only fits on paper.
- 05
Approach
The owners are contacted before a process starts.
- 06
Keeping it running
The framing stays live, because after the first acquisition comes the second.
Fit check
Does add-on sourcing suit your situation?
It fits when
- The platform is in place and the acquisitions are in the plan.
- You know where the gap sits, or want to sharpen it with me.
- Management should be involved but not do the searching.
- You want to reach the owners before a process starts.
Probably not when
- You are still looking for the platform itself. Then the search mandate fits.
- You need a picture of the market once. Then the market map is enough.
Common questions
What platform investors ask me
How is add-on sourcing different from the search mandate?
In a search mandate I look for the platform. In add-on sourcing it is already there, and the framing comes from it rather than from a thesis.
Do you work with the platform management?
Yes, and that is the most important part. The managing directors know what actually fits together. Without them I am sorting on paper.
How small can an add-on be?
Smaller than most people think. With acquisitions it is often the region or a single capability that counts, not the size.
Do you approach competitors of the platform?
If they fit and you want it, yes. We agree that beforehand, because in markets like these people usually know each other.
Who looks for the gap
Nick Herbig, personally
I sit down with the platform management before I search. Whoever does not understand the gap only finds companies that fit on paper.
More about me